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US Dollar Mute as U. of Michigan Sentiment Blows Past Estimates

US Dollar Mute as U. of Michigan Sentiment Blows Past Estimates

Dylan Jusino, Contributor

Talking Points

- Sentiment survey beat estimates at 97.6; long-term inflation lags behind.

- Markets overlook mixed data.

- Little change in US Dollar Index.

-See the DailyFX Economic Calendar and see what live coverage for key event risk impacting FX markets is scheduled for next week on the DailyFX Webinar Calendar.

The University of Michigan Consumer Sentiment survey came in at the highest level since January at 97.6 as the print beat the estimates at 94.0. Overall, the University of Michigan data was mixed; current conditions missed estimates at 111.0 versus 112.9 expected and 5 to 10 year inflation came in lower than the previous month at 2.5%

The University of Michigan Consumer Sentiment survey assesses consumer confidence regarding personal finances, business conditions and purchasing power based on hundreds of telephone surveys. Declining consumer confidence levels usually accompany any fall income or wages and precede drops in consumer spending. A low or falling U Michigan Sentiment value is considered an early indicator of an economic downturn. As a result, investors, retailers and traders alike all watch the figure for insight into the general health of the economy. University Michigan figures have recently preceded turning in overall GDP.

Next week the Kansas City Fed will host its annual Jackson Hole policy symposium. At the symposium markets will be looking for additional insight on long-term inflation expectations. They will either affirm or challenge U of Michigan’s deteriorating 5 to 10 year expectation. 1-year inflation expectations matched last month’s 2.6%.

Chart 1: DXY Index 15-minute Timeframe (August 18th 2017 Intraday)

Leading up to the release of the sentiment survey the US Dollar Index continued to channel within a narrow range. Little reaction is seen after the print. At the time that this article was written DXY traded around 93.43.

--- Written by Dylan Jusino, DailyFX Research

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.