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UoM consumer sentiment to dip in August, keeping focus on USD

The University of Michigan expects its preliminary August reading to fall to 54.5 from 55.2 in July, a shift that could influence rate expectations and near term dollar direction.

Reported · Written up by our desk · Major Pairs

The University of Michigan will release the preliminary August Consumer Sentiment Index on Friday, with economists expecting a moderate decline while the level remains relatively close to January and February.

FXStreet reports the index is forecast to ease to 54.5 in August from 55.2 in July. The outlook reflects uncertainty tied to the Middle East conflict, a deteriorating labor market, and persistently high price pressures.

In its setup for the data, FXStreet points to recent macro releases. The July CPI rate was 3.4% year over year, and the Nonfarm Payrolls report showed net employment contracted unexpectedly in July.

FXStreet also highlights comments from the University of Michigan’s Survey of Consumers director, Johanne Hsu, saying sentiment is 11.0% below a year ago amid elevated inflation and persistently high prices, leaving the market view on the Federal Reserve’s September policy stance largely unchanged.

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