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USD jumps on consumer confidence and Powell; Stocks pullback

Summary:

  • USD rising across the board as consumer confidence hits 18-year high
  • Powell upbeat and positive in first testimony to Congress
  • German inflation dips more than expected
  • US stocks pull back from 3-week highs
  • Mixed day in crypto with Iran considering launching its own cryptocurrency

 It’s been a good day for US dollar bulls with the Buck rising across the board. One of the main reasons for the gains was a larger than expected surge in consumer confidence, with the conference board index hitting its highest level since 2000.

 Whilst Powell is continuing to testify before Congress the initial market reaction has been positive for the Buck, with an upbeat and positive tone evident. Whilst the speech has stopped short of delivering any bombshells comments that further gradual rate hikes lie ahead and that the FOMC are monitoring inflation have supported the consumer data in boosting the Greenback. 

The USD appreciation has weighed on US stocks, with the US500 trading lower after earlier hitting a 3-week high. The market remains above its breakout level identified yesterday and how it trades into the close could well prove decisive going forward. 

Inflation on this side of the Atlantic will be in focus tomorrow morning with the Eurozone flash CPI due out. Today saw the release of the German equivalent and a larger than expected drop means that it is unlikely we get a significant rise tomorrow. The Euro itself is little changed on the day against most of its peers, with the USD the largest gainer. 

Looking at a daily time frame of the Bitcoin chart one may suspect the cryptocurrency could have already taken a major step toward an uptrend resumption. Some time ago we wrote about the Venezuelan thread concerning launching the petro (digital currency) by the country so as to bypass sanctions imposed by the US. Iran, which has harsh relations with the United States alike, has informed recently that a state-backed virtual currency may be launched as one of the country-based bank is working on the project.

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