US Dollar Index Rises on Encouraging Consumer Confidence Numbers
Consumer confidence beats forecasts
The Conference Board Consumer Confidence Index for August came out at 101.5. It was a much higher level than the previous month’s reading of 91. Among other data for the day, the Census Bureau’s new home sales numbers also came out higher than the previous month at 507,000. This was in line with the recently renewed growth in the housing markets.
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US Dollar Index rises
The initial trigger for movement in the US Dollar Index came from FOMC (Federal Open Market Committee) member Dennis Lockhart. He still thinks that there should be a rate hike this year. However, he maintained caution on the market developments, especially the Chinese devaluation and the fall in oil prices. These factors seem to complicate the FOMC’s decision.
Additional direction for the day came as a result of the monetary easing by the PBOC (People’s Bank of China). It saw the US Dollar Index garner strength on an intra-day basis. The positive bias in the Consumer Confidence Index and home sales also gave necessary strength to the US Dollar Index. It rose by 1.29% after five days of negativity.
Impact on the market
ETFs that focus on the retail sector gave an uptick on the release of the consumer confidence data, but they eventually ended August 25, 2015, on a negative bias. The SPDR S&P Retail ETF (XRT) and the VanEck Vectors Retail ETF (RTH) fell by -0.28% and -0.72%, respectively.