The US dollar deflated after the US consumer sentiment monitored by the Reuters/Michigan index was released at a record low missing forecasts by a large margin. The figures reported by the same index also indicated that consumer expectations were below consensus.
The US dollar index, which tracks the greenback’s performance, declined from a daily high of 101.01 to a low of 100.67 at the time of writing. The US dollar also weakened against its major currency counterparts such as the euro, the British pound and the Japanese yen.
The US dollar weakened significantly after the US consumer sentiment for February was reported at 95.7, which was much lower than the expected figure of 97.9. The consumer expectations figure was also reported at 87.7 versus the forecasted consesus figure of 89.0.
The US dollar was on a major rally after the ‘Trump trade’ was reignited by statements from the White House indicating that Donald Trump‘s administration was working on a major tax reform bill. Speeches by several Fed speakers also served to boost the greenback as they supported a hawkish outlook insisting that the Fed could still implement three rate hikes this year.
The US dollar’s performance is likely to be affected by future announcements by the Trump adminsitration gven that such announcements have triggered massive moves by the greenback as compared to fiscal and monetary releases.
The EUR/USD was tarding at 1.0643 as at 16:47 GMT having hit lows of 1.0606 earlier in the day. The USD/JPY was trading at 113.16 havingt hit highs of 113.85 earlier in today’s session.
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