Greenback Slumps on Equity Rally

The greenback relinquished gains against the euro and Aussie on the Tuesday session as UK and US markets returned from holiday. The US equity bourses lauded earlier upbeat economic reports, with a sharp unexpected rise in the Conference Board’s May consumer confidence survey to its highest level in 8 months at 54.9, versus a revised 40.8 a month earlier – triggering a sharp rally in the Nasdaq, up 3.45% and the Dow Jones, advancing by over 2.5%. The Richmond Fed manufacturing survey reversed some of its previous month’s declines, as the composite index edged up to 4 in May versus -9 in April, while the manufacturing shipments component improved to 9 from -3 and the services index held steady at -29.

However, not all the reports were positive, with the S&P Case-Shiller home price survey reinforcing current downward pressure on the housing market. The S&P Case-Shiller index in March slumped by 2.2% on a monthly basis and plunged by 18.7% on an annualized basis.