Home Forex U.S. dollar rises even as U.S. consumer optimism hits a low

U.S. dollar rises even as U.S. consumer optimism hits a low

by Paul
U.S. dollar

The U.S. dollar has picked up despite U.S. consumer optimism hitting a low

The greenback picked up steam on Friday despite U.S. consumer optimism hitting its lowest level since Donald Trump was elected president and the government shutdown moving into its 28th day.

The dollar was supported by a stronger-than-expected report for U.S. industrial production in December, in which manufacturing posted an impressive 1.1% gain from November. Such positive surprises relieve some of the worries about the strength of the economy after the slowdown at the end of last year. They also underline the relative strength of the U.S. compared to the Euro zone, where the Bank of Italy warned Friday that the country may have slid into recession with a second straight decline in GDP in the fourth quarter of last year.

However, the negatives for dollar sentiment haven’t gone away as Congress and Trump continue to struggle with their impasse over the budget and over 800,000 federal workers remain furloughed. The shutdown could have negative impacts on the economy, business leaders have warned this week as they presented their quarterly earnings.

The shutdown is clearly having an effect on U.S. consumers already as the University of Michigan’s Consumer Survey Center showed that consumer sentiment plummeted to a two-year low of 90.7 in January from 98.3 a month earlier.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, rose 0.17% to 95.875 as of 10:19 AM ET (15:19 GMT).

The dollar also continued to be supported by a Wall Street Journal report that U.S. Treasury Secretary Steven Mnuchin is in favor of easing tariffs on Chinese products. That sent U.S. stocks and the dollar higher late on Thursday, despite the Treasury Department denying the news.

Meanwhile, sterling retreated from its recent highs after weak retail sales data for December. GBP/USD decreased 0.51% to 1.2914. It’s still holding to most of the gains made in recent weeks, as the risk of an economically harmful hard Brexit appears to recede.

The yen, typically sought by investors as a safe haven during times of economic or market stress, was lower against the dollar, with USD/JPY rising 0.19% to 109.42.

Risk Warning:

This article is for information purposes only.

Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

Related News

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More