The United States Dollar Increases Slightly For July

Published on: 08/2/18 1:11 PM

Category: Uncategorised

The confidence of the consumers has increased after a disappointing decrease in June. The expectations were surpassed as the United States dollar reached a higher point than the previous month. A detailed look at the survey results have revealed the positivity of certain caveats. The figure for July was 127.4 and was higher than the 126.4 figure for June. The forecast for July was also lower at 126.5. The decreases seen in June are believed to be the result of lower income prospects. One of the most important aspects of the economic activity in the United States is consumer spending. The apparently strong performance for the survey in July represents a lifeline to United States equities. After the unraveling of the FANG portfolio, this area has been troubled.

A much closer scrutiny of the survey results has shown that despite the strength of the headline reading, the majority of respondents do not believe the pace of the economy’s growth will become faster in the future. The Conference Board’s Director of Economic Indicators is Lynn Franco. Franco made a statement that although the improvements in the current conditions suggest the strength of the economy is still growing, this is just consumer expectations and optimism regarding the economic outlook for the short term. The declines have been back to back suggesting this growth and acceleration is not being suggested by the consumers.

The optimism of the consumers regarding the economic outlook for the short term also dropped in July. There was an increase in the number of consumers anticipating an improvement in business conditions during the next six months. This figure increased from +2.4% to 23.1%. The figure representing the percentage of consumers who believe business conditions will deteriorate increased from +1.5% to 10.8%. The results indicate many consumers feel the economy may be reaching its peak. The conditions now also may indicate a wane in the future. There is some temporary optimism regarding United States equities. This provides insight about the perception of the consumers pertaining to the ongoing trade wars. The drop last month raised concerns that the trade wars were impacting the outlook of the economy and may cause serious issues. The current increase reveals consumers may not yet have been impacted by the trade wars enough to cause the economy to slow in the future.

The survey is an important piece of data but the focus of the investors has been dominated by other issues including the Mexican GDP, Canadian GDP and Japanese rate decision. Tuesday morning, the dollar and United States equities were a little more in the green. This may be the result of the Canadian GDP, confidence data and the BoJ decision.