The euro dropped against the dollar on Tuesday after industry data revealed that consumer confidence is surging in the U.S., which rekindled expectations for the Federal Reserve to begin scaling back stimulus measures. The Conference Board said its U.S. consumer confidence index rose to 76.2 in May. This is a five-year high from 69.0 in April, surging past expectations for a reading of 71.0. "Consumers’ assessment of current business and labor-market conditions was more positive, and they were considerably more upbeat about future economic and job prospects," Lynn Franco, director of economic indicators at the Conference Board, said in a statement. Fiscal uncertainties in the U.S. may have already taken their toll on consumer attitudes. Sentiment may be on the mend, Franco added. On Wednesday, Germany is to release preliminary data on consumer price inflation as well as data on unemployment change. Spain is scheduled to hold an auction of 10-year government bonds.
EUR/USD" title="EUR/USD" width="1098" height="718">
GBP/USD
The pound fell against the U.S. dollar in light trade on Tuesday. Trading resumed in the U.S. following a three-day holiday weekend with the release of positive economic data which showed that U.S. consumer confidence rose more-than-expected in May, hitting the highest level since February 2008. In the report, the Conference Board, a market research group said its consumer confidence index rose to 76.2 in May from a reading of 69.0 in April. The figure was revised up from 68.1. Analysts had expected the index to rise to 71.0 in May. Meanwhile, demand for the dollar continued to be supported by expectations that the Federal Reserve is moving closer to winding down its USD85 billion-a-month asset purchase program. Last week, Fed Chairman Ben Bernanke said that a decision to scale back bond purchases could be taken in the "next few meetings" depending on economic data. Also on Tuesday, the Case-Shiller U.S. home price index rose 10.9% in March from a year earlier, above expectations for 10.2% and the biggest increase since April 2006.
GBP/USD" title="GBP/USD" width="1098" height="718">
USD/JPY
The dollar firmed against the yen on Tuesday after U.S. industry data revealed consumers grew increasingly confident in the world's largest economy this month, which fueled hopes the Federal Reserve will begin to taper the pace of its stimulus programs. The Conference Board said its index of U.S. consumer confidence rose to 76.2 in May, a five-year high, from 69.0 in April, surging past expectations for a reading of 71.0. "Consumers’ assessment of current business and labor-market conditions was more positive and they were considerably more upbeat about future economic and job prospects," Lynn Franco, director of economic indicators at the Conference Board, said in a statement. Fiscal uncertainties in the U.S. may have already taken their toll on the consumer attitudes and sentiment may be on the mend, Franco added.
USD/JPY" title="USD/JPY" width="1098" height="718">
USD/CAD
The U.S. dollar was little changed against the Canadian dollar on Tuesday as trading resumed after the three-day holiday weekend. Demand for the greenback continued to be supported by expectations that the Federal Reserve is moving closer to winding down its USD85 billion-a-month asset purchase program. The pair showed little reaction after data showed that the Case-Shiller U.S. home price index rose 10.9% in March from a year earlier, above expectations for 10.2% and the biggest increase since April 2006. Investors were looking ahead to the outcome of Wednesday’s Bank of Canada’s policy setting meeting, Governor Mark Carneys last before taking over as governor of the Bank of England.
USD/CAD" title="USD/CAD" width="1098" height="718">