Consumer Confidence

Consumer sentiment and spending outlook indicators

Consumer Confidence & Forex

Consumer confidence measures how optimistic consumers feel about the economy and their financial situation. Since consumer spending represents 60-70% of most developed economies, confidence indicators are leading signals for economic growth and currency strength. High confidence typically supports currency strength, while low confidence can weaken it.

Consumer Confidence Index

MEDIUM IMPACT - USD

Conference Board's monthly survey of 3,000 US households on current conditions and future expectations.

Base Year:1985 = 100
Strong Level:Above 100
Volatility:30-80 pips

University of Michigan

MEDIUM IMPACT - USD

UMich Consumer Sentiment, released twice monthly with preliminary and final readings.

Base Period:1966 = 100
Releases:Mid-month & Final
Volatility:25-60 pips

Present Situation Index

CURRENT CONDITIONS

Component measuring how consumers view current economic and employment conditions.

Focus:Current economy
Employment View:Job availability
Market Use:Coincident indicator

Expectations Index

FORWARD LOOKING

Component measuring consumer expectations for economy, employment, and income over next 6 months.

Timeframe:Next 6 months
Recession Signal:Below 80 for 3 months
Market Use:Leading indicator

Buying Plans

SPENDING INTENTIONS

Consumer intentions to purchase major items like homes, cars, and appliances in coming months.

Categories:Homes, cars, appliances
GDP Impact:Consumer spending
Predictive Power:Retail sales

Inflation Expectations

FED POLICY INPUT

Consumer expectations for inflation over next year, important for Fed policy and currency outlook.

Survey Question:Next 12 months
Fed Target:Around 2-3%
Policy Impact:Monetary decisions

Trading Consumer Confidence

High Confidence Impact

  • Rising confidence → Increased spending → Economic growth → Currency strength
  • Strong buying plans → Retail sales growth → GDP expansion
  • Job market optimism → Wage growth expectations → Inflation pressure

Low Confidence Impact

  • Falling confidence → Reduced spending → Economic slowdown → Currency weakness
  • Pessimistic expectations → Recession signals → Dovish policy expectations
  • Below-80 expectations index → Historical recession indicator