The USD depends on the economic data
According to the latest economic data the United States dollar increased in relation to other major currencies but still it was quite affected by the fact of the decline of consumer spending and sales of property. The level of the consumer confidence is likely to fall to the 60.0 in the current month. According to Sal Guatieri at BMO Capital Markets the US consumers experience hard times due to decreasing house prices, growing energy and food prices and increasing rate of unemployment. The present fall of the consumer confidence level is one of the largest the US economy experienced.
Furthermore this situation will likely to worsen due to possible decrease in the new home sales volume that is expected to fall to 522.000 unit rate in April. According to experts opinion it would be difficult to return consumers back to market until the house prices will become stable despite the fact that the interest rate decreased and thus mortgages became more available.
As for the Euro, it decreased in relation to major currencies throughout forex trades as France and Germany released the data concerning the decline of the confidence in the economy. The Germany’s consumer confidence data decreased to 4.9 points instead of the 5.8 points proposed growth. The consumer confidence index in France declined to the point of 102.
So such changes caused the decrease of the Euro, however this will possibly last for a short period of time. Germany is expected to issue inflation numbers today. According to forecasts these numbers will show us growing prices and increase possibility of interest rates increase by the European Central Bank.
The British pound decreased today due to the announcement of difficult situation in the service sector. The data issued in the Confederation of British Industry’s quarterly survey provided low levels of business volumes and values thus causing no positive forecasts in the area of business expansion.
