Consumer confidence declines as recession challenges increase. Despite negative statistics, the DXY continues to rise.

Consumer confidence drops to 101.3 in April.

After a modest rebound at the end of Q1. A well-known indicator of U.S. consumer attitudes declined more than anticipated in April. This is an indication that Americans are beginning to look at the economy gloomily. In light of the continuing inflationary pressures, increased interest rates, as well as increasing recession risks.

Consumer confidence decreased to 101.3 this month from a downwardly revised level of 104.00 in March.  According to the Conference Board, the number came in under consensus expectations. Which were looking for a more moderate decline to 104.5. Families frequently reduce expenditures when the mood is bad. Given that home spending is the largest contributor to the U.S. GDP. This might become an issue for the economy.

Consumer Confidence Index Chart

Source: Conference Board

Consumer Confidence backdrop

Taking a more in-depth look at the survey’s specific components, the present-day situation indicator. Which measures the perception of present business and recruiting conditions, modestly increased to 151.1 from 148.9. Yet the expectations index, which tracks immediate prospects for income, the business environment, and the job market, took a dive. Falling from 68.1 to 74.00.

Concentrating on the projections index, scores under 80 are sometimes indicative of downturns. A rating of 68.1 is highly concerning and indicates that the country may be destined for a slump later in the year. Particularly if expenditure starts to decline sharply in the following months.

Results of the consumer survey suggest that the economy is getting worse and that there are clouds in the sky at present. This could cause the Fed to adopt an inversely hawkish strategy earlier than expected. In order to stop negative consequences from growing or taking form.

Theoretically, a change in monetary policy should be negative for the U.S. dollar unless it causes instances of flight to safety. In which case the dollar would gain. This seems to be the case as of Tuesday, as the DXY kept on rising in the wake of disappointing economic statistics.

5-MINUTE US DOLLAR (DXY) GRAPH

Source: TradingView