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Dollar Weakens Versus Euro After Consumer Confidence Report

Dollar Weakens Versus Euro After Consumer Confidence Report
4/24/2012 1:23 PM ET

The dollar has weakened against the Euro on Tuesday. Monday's panic over political and economic uncertainty in Europe has noticeably relaxed on Tuesday. The U.S. released several economic reports this morning, including the weaker than expected U.S. consumer confidence report for the month of April.

Consumer confidence in the U.S. was virtually unchanged in the month of April, according to a report released by the Conference Board on Tuesday, with the consumer confidence index coming in just below economist estimates. The report showed that the consumer confidence index edged down to 69.2 in April from a downwardly revised 69.5 in March. Economists had expected the index to slip to 69.7 from the 70.2 originally reported for the previous month.

A series of decent bond auctions in Spain and Italy eased concerns over Europe's debt crisis. The Netherlands held a successful debt auction on Tuesday despite the collapse of the government over budget cuts a day earlier.

The greenback has been losing ground versus the Euro since late Monday afternoon and reached $1.3217 on Tuesday, its lowest level since April 20th.

French consumer confidence unexpectedly increased in April, rising for a second consecutive month to its highest level in 17 months, data released by INSEE showed Tuesday. The seasonally adjusted consumer confidence indicator rose to 88 from March's 87. Economists had expected the index to remain unchanged. The dollar reached a 6-month low of $1.6163 versus the pound sterling Tuesday morning but has since inched back to around $1.6135.

The UK's public sector borrowing increased more than expected in March, according to the latest figures released by the Office for National Statistics, or ONS, on Tuesday. Meanwhile, the statistical agency's downward revisions to previous data allowed the government to keep its debts in line with its full-year target.

Public sector net borrowing, or PSNB, excluding temporary effects of financial interventions, was GBP 18.2 billion in March, up from last year's GBP 17.95 billion. The March borrowing figure was the highest since November 2010. This was also higher than February's downwardly revised reading of GBP 12.2 billion and economists' forecast of GBP 16 billion.

The buck has leveled off against the Japanese Yen on Tuesday. The currency rebounded from a one-week low of Y80.846, back to around Y81.200.

Home prices in major U.S. metropolitan areas showed a modest increase in the month of February, according to a report released by Standard & Poor's on Tuesday. The report showed that the S&P/Case-Shiller 20-City Composite Home Price Index edged up by 0.2 percent in February on a seasonally adjusted basis.

New home sales in the U.S. showed a notable decrease from February to March but nevertheless came in substantially higher than most economists had predicted. According to figures released by the Commerce Department on Tuesday, new sales of single-family houses came in at a seasonally adjusted annual rate of 328,000 in March.

The March rate reflects a 7.1 percent drop from the revised February rate of 353,000. However, the February revisions brought the new home sales rate for the month up significantly from the 313,000 initially reported. Most economists had expected new home sales to rise from the initial February report, predicting a March sales rate of 318,000.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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