The report detailing the level of confidence by consumers in the US is set to be issued on Tuesday 31 December 2013. At this time, many experts are expecting to witness a marked increase in the rate of confidence as it relates to the month of December 2013.
Readers are reminded that the report looks to measure the perceptions of consumers regarding how they feel about the market. This is comprised of different elements that include job security and their ability to sustain themselves in the economy. Analysts note that the recent jobs report from the month of November 2013 showed significant improvements with a large number of people added to the nation`s workforce. It should be noted that the drop in the unemployment rate was an essential element in the Federal Reserve`s decision to make cuts to the previously $85 billion stimulus package.
Analysts expect to see an increase in the value of the dollar in trading following the release of this report. As consumer spending makes up nearly two thirds of American economic activity, more confident consumers is likely to help boost the demand for the dollar. However, it should be pointed out that while the consumer confidence report is heavily followed, many economists often criticize it, viewing it as more volatile than the University of Michigan`s report which is more timely and is thought to take better controls for measuring family spending and costs.
USD Enjoys Gains Against Yen
It was reported on 30 December 2013 that the US dollar had reached a five year high against the Japanese Yen in trading. Analysts note that the dollar is said to have enjoyed an annual gain against its primary rivals in the 16 major traded currencies.
Analysts point to a series of positive reports and milestones of progress that have helped to improve the American economy in recent months and boost the desirability of the dollar to investors. As noted above, the achievements on employment were significant enough to lead to the lowering of bond and treasury purchases by the Federal Reserve, spiking up the value of the dollar to traders who had been eagerly awaiting the cuts. Furthermore, many experts believe that reports concerning the housing market and manufacturing which believed to show positive movement are due out later in the week, adding to the confidence in the dollar.
Traders are advised to watch for further gains by the USD against most of its competitors over the coming days and weeks as more investors continue to return to the dollar.
WTI Rises on Low US Stockpiles
Prices of oil at the West Texas Intermediate energy market were reported to have risen above $100 for a second day. Analysts point to a new round of government issued reports showing that levels of US stockpiles have dropped to the lowest levels since September 2013.
Analysts note that the WTI had suffered losses in recent weeks as supplies at the largest energy consumer were thought to have been at high levels, helping to lower demand along with the prices. As stockpiles continue to fall, demand for the winter will likely go up, helping to keep prices higher.
It should be noted that the markets are still anticipating the return of Libyan oil into the market. There are currently security issues preventing the opening of a number of key ports, halting the export of the crude. In the event that the Libyans return to their status as major suppliers, it could add to the global supply, thus suppressing prices. Moreover, should progress be seen in the negotiations with the Iranians, then there may be an allowance for them to expand some of their exports which had been affected by the embargo.
Analysts do not expect to witness any significant drops in the price of crude for the time being. That said, traders should watch for volatility in the market as it is highly susceptible to sudden shifts.