On Tuesday 03-31-09 at 10:00 AM ET, the USD-Consumer Confidence report will be released for the month of February. However, it will be reported along with the USD-Richmond Manufacturing Index – which hardly ever influences the market.
The previous USD-Consumer Confidence report came out on Tuesday 02-24-09 at 10:00 AM ET. Also there were 3 other reports along with Bernanke testifying on monetary policy before the Senate Banking Committee – what Bernanke says usually has some affect on the currency market.
The other 3 reports were USD-Richmond Manufacturing Index, the USD-House Price Index MoM, and the USD-House Price Purchase Index QoQ. These usually do not move the market.
The USD-Consumer Confidence report released in February, for the month of January, was set up as follows:
Previous Report: 37.7 – revised a few minutes later to 37.4
Economists Forecast: 35.5 – not an improvement for the US economy.
The actual report: 25.0 – less than forecast by 10.5, bad for the economy.
The “revision” could have an had an effect on the currency market – but certainly not as much has Bernanke’s testimony. Sometimes the market (traders) with wait to hear his testimony and react to his words of either doom and gloom or his optimism concerning the future of the economy.
I monitored 4 currency pairs during the February USD-Consumer Confidence report and here is what happened:
EUR/USD – moved down about 41 PIPS in 18 minutes – wrong direction
moved up about 55 PIPS in 32 minutes – right direction
GBP/USD – moved down about 42 PIPS in 22 minutes – wrong direction
moved up about 74 PIPS in 28 minutes – right direction
USD/CAD – moved up about 22 PIPS in 4 minutes – wrong direction
moved down about 90 PIPS in 43 minutes – right direction
USD/JPY – moved up about 65 PIPS in 45 minutes – wrong direction
The USD-Consumer Confidence report for this month’s release has a “forecast” of 27.8, an increase in confidence from last month‘s report of 25.0.
If the “actual” USD-Consumer Confidence report comes out less or more than the “forecast” by a large amount, say 5.0 or more, this would be a huge surprise for FOREX traders and the market may move considerably in the following minutes of the report.
So, let’s set this up:
The February previous= 25.0
The economists forecast= 27.8
If the “actual” report comes out 32.8 or more, this will be good for the USD, and a big surprise for traders. Any currency pair which includes the USD may move in favor of the USD.
However, if the “actual” report comes out at 22.8 or less, this would be bad for the USD and again, a big surprise for traders. Any currency pair which includes the USD may move against the USD .
The probabilities set forth above are assuming no unpredictable events are taking place at the same time.
Speeches on the economy by government officials, or a situation somewhere in the world that could have an impact on the U.S. or Canada economy – could adversely affect the market.
Sometime after the end of the USD-Consumer Confidence report I will post a results. So, check back!
Tuesday 03-31-09:
Here are the results of USD-Consumer Confidence report:
Looks like more people have gained confidence in the economy last month, up 0.7 from the revised February report of 25.3. This report should be good for the USD! But the “actual” report was less than “forecast”.
Here is how it affected the 4 currency pairs I follow:
EUR/USD – moved down/up about a 20 PIP “range” for 45 minutes
then moved down about 38 PIPS in 6 minutes – right direction
GBP/USD – moved down about 5 PIPS in 2 minutes – right direction
then moved up about 47 PIPS for 56 minutes – wrong direction
USD/CAD – moved up/down about a 20 PIP “range” for 23 minutes
then moved down about 26 PIPS in 9 minutes – wrong direction
then moved up about 25 PIPS for 11 minutes – right direction
USD/JPY – moved up about 55 PIPS in 58 minutes – right direction
Even though the “actual“ was not as high has forecast, it was still good for the US economy, even the “revision“ was a little helpful.
Looks like the USD/JPY currency pair was the best trade today.
