For this index, ‘Actual’ greater than ‘Forecast’ is good for currency;
The Conference Board Consumer Confidence Index® decreased in January following an upwardly revised increase in December 2022. The Index now stands at 107.1 (1985=100), down from 109.0 in December (an upward revision). The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—increased to 150.9 (1985=100) from 147.4 last month. The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—fell to 77.8 (1985=100) from 83.4 partially reversing its December gain. The Expectations Index is below 80 which often signals a recession within the next year. Both the present situation and expectations indexes were revised up slightly in December.
This report prepared by The Conference Board Inc. is released monthly, on the last Tuesday of the current month and has a high impact on market movement by giving information about the level of a composite index based on surveyed about 3,000 households which asks respondents to rate the relative level of current and future economic conditions including labor availability, business conditions, and overall economic situation.
Why does this index matter to forex traders?
Financial confidence is a leading indicator of consumer spending, which accounts for a majority of overall economic activity;