Dropping consumer confidence dips the Dollar

The dollar fared badly on the exchanges yesterday and gave back the gains of Monday's trading. This was mainly due to consumer confidence figures coming in lower for the 6th month in a row and much lower than market expectations.

With stocks trading lower again yesterday as well it is thought that although rates are expected to remain on hold tonight at the FOMC meeting Mr. Bernanke's comments after may not be as hawkish as the market were looking for. This places even more importance on the data due to be released before the announcement and anything lower than expected on the Durable goods numbers and May new home sales figure could see the dollar come under pressure again today. 

The Euro had a better day yesterday mainly due to the dollar weakness and shrugged aside the disappointing German consumer confidence figure that came in at 3.9 versus the expected 4.6. 

Sterling was slightly higher than were it traded on the exchange markets on Monday but the upside seemed limited after mortgage approvals fell again last month and is now 56% lower than this time last year, this figure lowered expectations of a rate rise at the next BoE meeting. 

Although most of the focus will be on the US today this morning there is data released in Europe . The pick of which is that Mr. Trichet is speaking at 9.30 UK time and at 10.00 we have Eurozone Industrial orders due. In the UK the CBI sales figures for May should be a number that dealers keep an eye on.