By Christopher Vecchio, Junior Currency Analyst THE TAKEAWAY: [U.S. Consumer Confidence Misses] > [Economic Outlook Rapidly Deteriorating] > [ USD Gains ] An index of sentiment fell to its lowest level since March 2009, according to a report issued on Tuesday by the Conference Board. The research group’s consumer confidence index fell to 39.8 in October from a revised 46.4 in September, marking one of the biggest point drops since October 2008, when the financial markets began to unravel at a quickening pace. According to a Bloomberg News survey, economists’ had forecasted the figure to come in at 46.0; the print marks another major data release in which the forecast has missed by a significant margin, underscoring the notion that the economic climate is worse than what the markets are already pricing in. In fact, based on how equity markets are performing and how the U.S. Dollar has been underperforming, one would be lead to believe the U.S. economy is on the cusp of a major bull run; consumer confidence is suggesting the opposite. USD/CAD 1-minute Chart: October 25, 2011 Charts created using Strategy Trader – Prepared by Christopher Vecchio The U.S. Dollar was stronger after the news, as were the other funding haven currencies, the Japanese Yen and the Swiss Franc, as market participants traded in higher yield, in the form of the commodity currency block, in favor of safety in the form of lower yields. In the minutes leading up to the release and approximately ten after, the AUD/USD dipped by approximately 30-pips, in line with the equity markets’ collective response by sliding sharply lower. At the time this report was written, the AUD/USD had already pared back all of its losses and was trading above its prerelease figure. The confidence report came as Euro-zone officials corrected an earlier report which said that finance ministers had cancelled their meeting for tomorrow; on the contrary, the finance ministers’ meeting was not crucial to coming to the debt crisis resolution and the summit is expected to proceed as scheduled on Wednesday. --- Written by Christopher Vecchio, Currency Analyst To contact Christopher Vecchio, e-mail email@example.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 firstname.lastname@example.org .
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