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Can US dollar weather weaker consumer confidence index?

business-articlesCan US dollar weather weaker consumer confidence index?
  • US dollar exchange rates vulnerable to consumer confidence data

  • Brexit speculation to weigh on pound

  • Inflation data to provoke Australian dollar volatility


Weaker consumer confidence to dent US dollar

As US political tensions have eased slightly the mood towards the US dollar has improved, returning to a stronger footing as the government shutdown ended.
However, USD exchange rates could return to a weaker footing this afternoon if January’s consumer confidence index weakens as forecast.
After the disruption caused by the shutdown consumer sentiment is likely to have deteriorated on the month, reflecting the negative impact this had on the wider economy.
If the confidence index betters expectations, though, the US dollar could gain further ground against its rivals.

Brexit debate to drive pound demand today

Political developments look set to dominate the outlook of the pound today as MPs debate Theresa May’s withdrawal agreement and proposed amendments to the deal.
Although no breakthrough on Brexit is anticipated at this stage the debate could still provoke significant volatility for GBP exchange rates.
The success or failure of various amendments are likely to influence the mood of investors, driving the pound’s movement.
However, any indication that the odds of a no-deal Brexit have risen may prompt the pound to slump sharply across the board.

Australian dollar vulnerable ahead of inflation data

Ahead of tomorrow’s Australian consumer price index data demand for the Australian dollar is likely to prove limited.
Forecasts point towards the headline inflation rate easing from 1.9% to 1.7% in the fourth quarter, moving further below the Reserve Bank of Australia’s (RBA) 2% target.
With the RBA already looking set to leave interest rates on hold for some time to come any easing in inflation is likely to add to the bearishness of AUD exchange rates.
On the other hand, a stronger showing could give the Australian dollar a fresh rallying point tonight.

Upcoming Data:

Tuesday, 29th January 2019
15:00 USD Consumer Confidence Index
19:00 GBP Parliamentary Vote

Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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