Dollar slips as US consumer confidence sinks
NEW YORK (Sept 24) - The dollar fell against a basket of currencies on Tuesday after data showed in U.S. consumer confidence fell in September, raising worries about the strength of the U.S. economy.
U.S. consumer confidence fell by the most in nine months, more than expected, as Americans’ economic outlooks darkened in the face of the U.S.-China trade war, according to a private- sector report released on Tuesday.
The Conference Board, an industry group, said its index of consumer attitudes fell to 125.1, from an downwardly revised 134.2 the month before.
“It is a worrying early sign that consumer spending, the key bastion of strength for the U.S. economy in recent months, may not be immune to the trade war,” Michael Pearce, senior U.S. economist at Capital Economics, said in a note.
The dollar index, which measures the U.S. currency against six major currencies, was down 0.1%.
The dollar lost ground earlier against the euro after data showed German business morale rose in September for the first time in six months. Gains for the euro were capped, since the German economy is still likely to slip into recession as the U.S.-China trade conflict and Brexit bite, the Ifo economic institute said.
That followed Monday’s euro zone composite flash Purchasing Managers’ Index (PMI) on Monday, which sank to 50.4 in September from 51.9 in August, lower than all forecasts in a Reuters poll, which had predicted a reading of 51.9.
“The (European) data was quite negative but I think the euro has stabilized for now and we see it heading up to $1.12 versus the dollar in the coming months,” said Manuel Oliveri, an FX strategist at Credit Agricole in London.
The euro was up 0.11% at $1.1003.
The dollar found little support from safe-haven flows as concern about trade talks between Washington and Beijing eased after Treasury Secretary Steven Mnuchin said on Monday he and Trade Representative Robert Lighthizer would meet with Chinese Vice Premier Liu He for talks in early October.
“It feels like we are having a risk-on day today,” said Minh Trang, senior currency trader at Silicon Valley Bank in Santa Clara, California. “A lot of this is really stemming from the expectation of trade negotiations come October.”
Sterling gained after the UK Supreme Court ruled that Prime Minister Boris Johnson’s decision to suspend parliament for five weeks was unlawful, a decision seen as making less likely Britain would leave the European Union without a transition agreement.
The pound was up 0.36% against the dollar.
Reuters
