The consumer confidence index leapt from 47.4 in July to 54.1 in August, crossing the 50 mark which separates positive from negative data. This is the first gain in three months and signals a dramatic recovery from the 25.3 recorded in February.

The rise in confidence exceeded market expectations and came partly due to the Fed's "cash for clunkers" initiative. However although positive, the US recovery will still have to contend with a bottomed out property market and unemployment which is expected to top 10%. Housing figures also released today show despite the index rising 0.5% in June, house prices have fallen 6.1% in the second quarter. The median house price is now USD174 000, 16% lower than this time last year.

US foreign exchange rates are mixed following the news, rising against the pound, Canadian dollar and Asian currency partners while declining against the euro, yen, Australian and New Zealand dollars. The USD is currently valued at GBP0.6105 and EUR0.6976.

The rates quoted above are interbank rates. Client rates may vary according to the volume and timing of the trade.