USDJPY Rallies after Consumer Confidence Soars to Seven-Month Highs

USDJPY Rallies after Consumer Confidence Soars to Seven-Month Highs 09/25/2012 - 14:28:00 (DailyFX) Confidence among American consumers in September rose back to its highest level since February, a potential sign that the Federal Reserve’s new QE program has raised hopes for a stronger recovery in the US. THE TAKEAWAY: USD Consumer Confidence (SEP) > 70.3 versus 63.1 expected, from 61.3 > USDJPY BULLISH Despite weak headline growth and dimming labor market prospects, the US consumer is nearly as confident as they were near the start of the year, according to the Conference Board’s Consumer Confidence index released today. The sentiment gauge rose to 70.3 from 61.3, cruising past the 63.1 expected. There are a few reasons why consumers may be becoming more confident despite numerous headwinds: housing prices have started to rebound; stock markets are near all-time highs; and the Federal Reserve has unleashed a massive (truly unprecedented in nature) balance sheet expansion. In part, these are the same factors influencing American voters’ decisions headed into the US Presidential Election: it is of no surprise that the Consumer Confidence index has risen alongside with President Barack Obama’s polling figures in recent weeks. USDJPY 1-minute Chart: September 25, 2012 Charts Created using Marketscope – Prepared by Christopher Vecchio Ahead of and following the release, the USDJPY was on the move higher, trading up from 77.74 to as high as 77.92. However, at the time this report was written, the USDJPY had fallen back to 77.84. Elsewhere, the US Dollar was weaker, with the EURUSD trading up to 1.2967 from 1.2944, while the AUDUSD rallied from 1.0447 to as high as 1.0463. --- Written by Christopher Vecchio, Currency Analyst To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com Follow him on Twitter at @CVecchioFX To be added to Christopher’s e-mail distribution list, send an e-mail with subject line "Distribution List" to cvecchio@dailyfx.com