Uncertainty Prevails In U.S Economic Signals

Approaching the end of the week, the economic signals for U.S dollar ($) have been undecided so far. While the home sales (both new and pending) remained hawkish, a withering (9 points decline) in conference board consumer confidence was manifested in the form of decelerating home prices among other economic situations including labor availability and business conditions. This was by far one of the strongest indicators of the week hinting towards the upcoming trend for U.S dollar index.

A number of FOMC members have also held conferences this week that hinted towards a lack of general economic consensus. Many of the economists, including the likes of Mr. Evans, the current CEO of the Federal Reserve Bank of Chicago, lauded the role that FOMC (Federal Open Market Committee) has played in reaching the target of 2% annual inflation. He further recommended that there is currently no need to advance a rate cut any further.

On the other hand, another Federal Bank representative from St. Louis, Mr. Bullard recommended that there is room for FOMC for further economic improvements. While he congratulated the FOMC for its performance thus far in accomplishing the set targets, he recommended a further rate cut of 25bp by the end of the year 2019.

Compared to the last week, the crude oil refinery inputs for the U.S witnessed a 193,000 barrels decline per day, operating at 89.8% of the total operable capacity. An increase in gasoline production (10.2 million barrels/day) was counteracted by declining production of distillate fuel (5.0 million barrels/day). Imports of U.S crude oil were confined to 6.4 million barrels on a daily basis averaging more than half a million barrels decline per day.

According to the Bureau of Economic Analysis, the third estimate for Gross Domestic Product (GDP) for the U.S was estimated at 2.0% increase annually. Aligning itself with the forecast and the second estimate, it contributed towards price stability for the U.S dollar index. However, the U.S consumer spending power on September 27^th, 2019 (Friday) is likely to ultimately determine the upcoming trend for the U.S dollar.

All in all, the U.S dollar has experienced both bulls and bears this week. While the majority of the bear traps have been retracted, it is being anticipated that the U.S economy has already taken a blow. Blend it with the formal impeachment inquiry held this week against President Trump in Washington, and the uncertainty appears more imminent in the weeks to come.

In conclusion, unless the events like durable goods orders and consumer spending unfold later today, the economic signals for U.S dollar remain mixed and are to be treated with apprehension.