Dollar Weakens Against Other Major Currencies After Downbeat Consumer Confidence: Jun 1, 2016

Dollar Weakens Against Other Major Currencies After Downbeat Consumer Confidence: Jun 1, 2016

Market Review - 31/05/2016 23:10GMT 

Dollar weakens against other major currencies after downbeat consumer confidence

The greenback weakened against other major currencies on Tuesday after U.S. economic data failed to support expectations for a June or July Federal Reserve interest rate hike. 

Versus the Japanese yen, despite dollar's intra-day rebound from 110.80 to 111.35 in Asian session, price retreated to 110.89 in European morning and then lower to 110.50 in New York session as data from U.S. on Tuesday failed to support expectations for a Fed's rage hike in June. 

The Conference Board said its index of consumer confidence for U.S. fell to 92.6 in May from a reading of 94.7 in preceding month, whose figure was revised from a previously reported 94.2. Having said that, the Commerce Department showed that personal spending climbed by a seasonally adjusted 1.0% in April, above expectations for a gain of 0.7%. Personal spending for March rose 0.1%. Personal income, meanwhile, rose by a seasonally adjusted 0.4%, in line with forecasts and after rising 0.4% a month earlier. Separately, market research group Kingsbury International said its Chicago purchasing managers’ index declined by 1.1 points to a seasonally adjusted 49.3 this month from a reading of 50.4 in April. Analysts had expected the index to rise 0.5 points to 50.9 in May. 

The single currency erased most of its earlier intra-day gains in New York morning after Reuters news reported that ICM/Guardian online polls shows 44% of Britons would vote to remain in EU, 47% to leave. During the day, despite a retreat from Asian high of 1.1155 to 1.1122 in European morning, price climbed higher to 1.1173 in New York morning due to renewed greenback's broad-based weakness before retreating sharply to 1.1125. 

The British pound turned lower against the greenback in New York session after Reuters news reported that ICM/Guardian poll on Britain's EU referendum shows 'leave' camp ahead. During the day, the British pound found support at 1.4624 in Australia and then rallied to 1.4727 in Asia before falling to 1.4568 in Europe. Later, despite a rebound to 1.4654 in New York morning, price fell sharply to 1.4542 after the news and then lower to 1.4465 in New York afternoon. 

Reuters news on Tuesday showed that online polls shows 44% of Britons would vote to remain in EU, 47% to leave. Also, ICM/Guardian telephone poll shows 42% of Britons would vote to remain in EU, 45% to leave. 

Data to be released on Wednesday: 

Japan's capital spending, Australia's GDP, Japan Nikkei manufacturing PMI, Switzerland's GDP, retail sales, UK's BRC shop price index, nationwide housing prices, Markit manufacturing PMI for Italy, France, Germany, euro zone and UK, U.S.'s ADP employment, Markit manufacturing PMI, construction spending, Fed's Beige Book.