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A measure of consumer attitudes, preferences, and expectations concerning the state of the economy and business cycle conditions that is compiled each month by The Conference Board. The Conference Board is also responsible for compiling the leading, coincident, and lagging economic indicators.
The Consumer Confidence Index is one of two primary measures of consumer attitudes. The other is the Index of Consumer Sentiment developed by the University of Michigan.
Why is it useful?
The importance of consumer confidence index on the currencies market is important, because it influences consumers' consumption levels, so if the expected percentage inclines, means that the consumer confidence in the domestic economy will likely to improved and it affects consumers' willingness to spend money that allows them to obtain available goods and services; as a result the aggregate demand will increase which cause rising production by different industries. Accordingly the effect is positive to the currencies.
At the same time this indicator has a similar effect on the stock market, because if it shows positive figures that mean it will leave a significant improvement on several companies stocks in different sectors, as the outcome to increasing consumers' spending means more demand, which pushes up stock indices.
Some studies proved that this effect might be theoretically true, that in fact it might not leave any considerable effect on the local currency; that's why the effect is not necessarily valid every time and is moderate.
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