Forex: EUR/USD – Lower at 1.3265 on modestly higher demand for USD in NY session

on Jul 26, 2013
Listen Friday July 26th: The euro softened some 40 pips in New York a little while back, as the market awaited the UoM consumer confidence update. The pair fell to 1.3252 before recovering a few pips to 1.3265.

The Thomson Reuters/University of Michigan’s Index of Consumer Sentiment fell to 82.7 in June, below a near six-year high of 84.5 in May and disappointing expectations for no change.
The latest reading is however the second highest in the past eight months, putting a brighter tint on the USA’s longer-term economic prospects.
According to UoM, confidence fell most amongst lower-income households, with consumers especially less optimistic about job prospects. Confidence was also hurt by tax hikes and the sequester, according to High Frequency Economics’ chief economist Jim O’Sullivan, who also noted that the overall index remains up on tame inflation, rising wealth and a reasonable labor market.

Sentiment in relation to current economic conditions fell to 92.1 from the prior 98.0, while consumer expectations jumped to 76.7, its highest levels in seven months.
So far today, the Dollar Index has fallen by 0.5 percent to 81.579, its lowest value since June 20, amidst growing speculation that the US Federal Reserve plans to do nothing new or different at next week’s FOMC meeting.
“Markets are looking for anything that could shed light on what the Fed’s thinking is on QE”, said Greg Moore, a currency strategist at Toronto-Dominion Bank, in an interview today. The growing consensus is that the FOMC will not next week be ‘accommodative’ of that search.