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| UoM Consumer Confidence Index Falls to 63.4 in March, Missing Expectations |
The University of Michigan's Consumer Confidence Index fell to 63.4 in March's flash estimate, missing expectations of 67 and down from February's reading of 67. The decline in consumer sentiment was driven by the weaker year-ahead inflation expectations, which fell to 3.8% from 4.1% in February. However, long-run inflation expectations edged down to 2.8%, the second time it has fallen below the 2.9-3.1% range in the last 20 months. With ongoing turbulence in the financial sector and uncertainty over the Fed's possible policy response, inflation expectations are likely to be volatile in the coming months, warns Joanne Hsu, Surveys of Consumers Director.
Despite the disappointing reading, the US Dollar Index managed to hold above the 104.00 level and remained in negative territory. The initial market reaction saw the index losing 0.35% on the day, reflecting investors' concerns about the weaker consumer sentiment and inflation expectations in the US economy. All eyes will now be on next week's FOMC decision to get a clearer sense of the Fed's policy outlook and how it could impact the US Dollar.
