By NICHOLAS HASTINGS While much of the rest of the world continues to bite its nails worrying whether the end of the euro is nigh, the U.S., or at least the U.S. consumer, appears to be pretty much immune to the whole thing. Last Friday’s survey from the University of Michigan showed consumer confidence rising to its highest level since October 2007, an extraordinary feat when confidence elsewhere in the world has been falling. This is certainly proof positive of just how insular the U.S. can be. But, in this case, being immune to the problems facing the rest of the world may not be such a bad thing, for the U.S. itself as well as for the dollar. It is just this sort of strong consumer confidence that is needed to help the U.S. secure the recovery that the global economy needs. For months, the upturn in the U.S. has been faltering. Employment levels have been rising but nowhere as quickly as many had hoped. As a result of this, as well as the deteriorating situation in Europe, the U.S. Federal Reserve has remained on standby to inject more monetary easing if needed to stop the economy slipping back into recession. The confidence data suggest, however, that the economy may be ready to start climbing again on its own. Falling oil prices, which are translating into lower prices at the gasoline pump, as well as improvements in the housing market are both helping consumers to feel less strapped for cash. The key, of course, remains employment. After two months of disappointingly small rises, hopes are that this Friday’s non-farm payrolls will show more than the fairly modest 150,000 rise that is forecast. This would certainly provide an additional boost to consumer confidence and allay fears that the U.S. economy is slipping back towards recession. All the same, it won’t be plain sailing. Other data could well prove less supportive. A second reading of first-quarter GDP could revise growth down to 1.9% from 2.2%, while the latest manufacturing ISM survey could well show a decline. For the time being, though, the Fed remains constant with its dovish stance unlikely to change until the problems of the euro zone stop threatening global financial markets. With the U.S. still providing the one main bright spot in the global economy, the dollar has continued and is likely to continue benefiting. At the end of last week, the dollar index rose to its highest levels since September 2010 while figures from the Chicago Mercantile Exchange showed that net speculative longs in the U.S. currency had risen to their highest since May 2008. So it increasingly looks that as long as U.S. consumers can ignore the crisis across the Atlantic and provide enough domestic demand to power their own economy, then the dollar will more than likely remain in the ascendant, even if the Fed is still prepared to ease policy again.

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