US Dollar Struggles to Rise Against Euro Despite Strong Consumer Confidence

The US dollar traded within a tight range against the euro on Tuesday despite a strong reading for consumer confidence in the United States. The greenback struggled to move higher today as mixed data in the eurozone gave enough support for the shared currency to hold its ground.

The Conference Board released a fresh report on consumer confidence in October, which showed that the consumer confidence index rose to 125.9 this month from 120.6 in September. Analysts had expected a smaller gain to 121.0, however, the higher reading reflected increased optimism between consumers. The reading in October was the highest in record since December 2000 as the labor market remained near the strongest level since 2001.

A subindex that tracks consumers’ view on present economic situation rose from 146.9 in the last month to 151.1 this month. Another index that tracks future expectations climbed from 103.0 to 109.1, which showed that the increase in October was based on broad gains.

A separate reading for the S&P/Case-Shiller House Price index revealed a 5.9% increase in August, which was smaller than analysts’ estimate of a 6.0% increase.

The US dollar has been influenced by traders’ anticipation for the announcement of the next US Federal Reserve Chair, which will have a great effect on the future of the currency. President Donald Trump said that he will make the announcement ahead of a scheduled trip to Asia on November 3.

Most reports pointed to Board of Governors member Jerome Powell as the most likely candidate for the position. Powell holds a stance that, while more hawkish than that of current Federal Reserve Chair Janet Yellen, is still less hawkish than other possible candidates. Investors might view the nomination of Powell by the president as a sign of continuity of the current Federal Reserve’s interest rate policy in 2018.

Meanwhile in Europe, the gross domestic product grew by 2.5% in the third quarter, according to a fresh estimate from Eurostat, which beat expectations of 2.1%. However, the gain was partly overshadowed by a 1.4% increase for the consumer price index in October, which was 0.1% smaller than last month’s reading.

A third release showed lower unemployment rate than anticipated in September at 8.9%, which added to an overall support for the euro today that kept it trading on an equal footing with the US dollar today.

EUR/USD traded at 1.1649 as of 15:45 GMT on Tuesday, after touching 1.1654 at 14:35 GMT, the pair’s highest level since yesterday. EUR/USD began trading today at 1.1645.

The Dollar Index, which tracks the performance of the US currency against a basket of its major peers, dropped to 94.55 today from 94.56 yesterday.

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