US consumer confidence fell to a 1-year low today and totally wiped out investor appetite for risk, causing the US Dollar and Japanese Yen to soar again. According to the CB Consumer Confidence report, released today at 15:00 GMT, February has been the gloomiest month for US consumers since April of 2009, mostly due to continued pessimism about the jobs outlook. The CB reading was reported at 46.0 in February, well below the expected score of 55, and also much lower than January's score of 56.5. The CB report is essentially a survey of about 5,000 US households which asks respondents to rate the relative level of current and future economic conditions including labor availability, business conditions, and the overall economic situation.  Any score below 50 indicates expected economic contraction.

However, the USD skyrocketed versus the Euro and other major global currencies. Some of the movement into the USD was due to overall risk-aversion, but much of it was the result of continued worries about the fiscal problems of Greece and some other Euro-Zone countries. The euro tone is so negative right now that any moderately worrisome news coming out of the region is sending investors fleeing from the Euro, into the USD and JPY. Earlier data today showed that Germany's business confidence index fell unexpectedly, and a prominent German economist said that Germany's economy, the euro zone's biggest, may have contracted in January. The Eurodollar plunged about 190 pips today, from a high of around $1.3685, to $1.3500, where it found support.

Moving forward, the focus will shift to US Federal Reserve Chairman Ben Bernanke, who will testify before Congress on Wednesday and Thursday. Investors will be looking for any comments on the Fed's unexpected decision late last week to raise its discount rate. The Fed has already tried to tame dollar bulls, saying that the move was not an indicator of tightening the broader US economy, and that the federal funds rate, its main monetary policy tool, would remain low for an extended period.

Look for continued dollar strength, at least in the short-term and possibly going into the mid-term.