Consumer confidence in the U.S. was lower than predicted in July. It came in at 95.7, down from the projected 97.0. The number also shows a decrease from the previous month’s reading of 98.4. The dismal data accompanied poor housing statistics, as recession concerns are being widely expressed ahead of the FOMC meeting scheduled for July 27th.
Rising food and gas costs continue to have a negative impact on consumer confidence, according to the Conference Board’s research. The number of people intending to buy houses, vehicles, and appliances all decreased in July.
The Federal Open Market Committee (FOMC) plans to raise interest rates by 75 basis points on Wednesday. A tightening of monetary policy coincides with a slowdown in the US economy and high inflation. In recent days, markets have moved to price in a Fed shift. This comes with recession worries deepening each and every day.
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DAILY CHART FOR US DOLLAR INDEX (DXY)
On Tuesday July 26th, the US Dollar was bolstered by the weakening of the Euro as a consequence of the early morning gas reports. Observers will be watching closely to see falling wedge formation on a daily basis. We’ll have to wait and see if this “break” is merely a “buy the rumor, sell the news” move before the FOMC’s crucial meeting. In spite of the Fed’s 75-basis-point price target, negative US economic data might continue to weigh on the USD’s upward potential. DXY might push to the 108.18 region before testing the YTD highs if the upward trend continues from this wedge.
Inflation and additional rate hikes are expected to have a negative impact on consumer spending and economic growth. This is likely to go on for another six months.
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