As outlined yesterday there is very little fundamental news on the economic calendar for the early part of the week and this is certainly reflected in today’s announcements for the euro to dollar pair for which there are only 2 of any consequence.   The first of these is the TIPP Diffusion Index which is based on a survey of around 1000 consumers which asks for their comments on the current economic climate, and interestingly also questions them on their confidence in the Federal Reserve’s economic policies.  As with many of these indices a result above 50 suggests optimism whilst below indicates pessimism and the forecast for this afternoon is for 45.1 against a previous of 45.3.  When plotted on a chart the figures have been steadily increasing from a low of 37.4 in July 2008 to today’s predicted at 45.1, but it is interesting to note that this index has remained below 50 for the last 2 years with only one exception in November 2008 when it marginally crept over the dividing line and recorded a figure of 50.8.

The last item of news is due out late this evening and is released by the Federal Reserve and measures the change in the total value of outstanding consumer credit and that which requires instalment payments.  The reason that it is important is that it is correlated with both consumer spending and also with confidence as rising levels of debt suggest that lenders are comfortable lending money and equally that consumers are confident to borrow and spend.  The forecast is for a figure of -2.2 billion against a previous of +1.8bn suggesting either that credit is contracting or consumers are unwilling to spend.  In the last 3 months this figure has showed some dramatic swings from a -7.9bn in January to a +1.8bn in March.   If the actual is better than the forecast then this should be good news for the US dollar.  Looking further ahead to tomorrow and Thursday on both days we have significant news items both in Europe and the US and these include FOMC minutes, crude oil inventories, German output and trade balance and unemployment claims in the US on Thursday.  Friday is a national holiday in many countries and you can find details on this by simply following the link.

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