US dollar falters on declining consumer confidence

November 27, 2013 12:08 AM

Finances The US dollar failed to extend its rally after consumer confidence fell to a seven-month low. The Consumer Confidence Index, courtesy of The Conference Board, fell to 70.4 in November, as long-term employment prospects continue to weigh heavily on US consumers. The US dollar index declined 0.3 percent to 80.68 after the euro and Japanese yen made strong advances. The euro soared 50 pips to 1.3570 US, shrugging off dovish comments from European Central Bank board member Benoit Coeure, who said negative deposit rates were still on the table. The common currency declined sharply early last week when the idea of negative deposit rates began surfacing. Activity picks up Thursday with the release of Spanish gross domestic product data and several euro area confidence indicators. The yen strengthened in the Asian session despite clear division among central bank policymakers concerning the pace of economic recovery. The minutes of the latest Bank of Japan policy meetings showed three of the nine BOJ board members believe greater downside risk still persists in the economy. The central bank hopes to achieve a sustained annual inflation rate of 2 percent by 2015. The USD/JPY fell more than 0.2 percent to 101.32. The British pound gave up gains in the European session after Bank of England Governor Mark Carney asserted the 7 percent unemployment target isn’t a rate-hike trigger. The GBP/USD returned to positive territory in North America, gaining 30 pips to 1.6193 US. The greenback held firm against the commodity rivals. North of the border, the Canadian loonie was still in negative territory. The USD/CAD advanced 13 pips to 1.0548, having eased off the Monday highs. Down-under, the Australian dollar fell 45 pips to 0.9124 US. The dollar received a push Monday after Iran and the P5+1 states struck a nuclear accord in Geneva. The greenback should continue to enjoy a strong bid amid declining risk aversion in the global markets.
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