American consumer confidence regained momentum in early July, as households grew more optimistic about current conditions and the broader economic outlook, according to preliminary data from the University of Michigan.
The closely watched Consumer Sentiment Index is expected to improve to 54.4 from 49.5 in the previous month, surpassing economists’ expectations and signalling a better backdrop for public confidence.
Inflation expectations, meanwhile, came in mixed. The one-year outlook eased to 4.2% from 4.6%, and the five-year forecast held steady at 3.3%, suggesting that consumers are seeing some loss of momentum in price pressures, in line with recent inflation data.
Market reaction
The dollar remains slightly bid amid the broader choppiness seen throughout the week. That said, the US Dollar Index (DXY) navigates the 100.80 region in the wake of the data release, adding to Thursday’s rebound.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.05% | 0.19% | -0.02% | -0.22% | 0.24% | 0.11% | -0.14% | |
| EUR | -0.05% | 0.14% | -0.07% | -0.31% | 0.19% | 0.06% | -0.20% | |
| GBP | -0.19% | -0.14% | -0.24% | -0.45% | 0.04% | -0.07% | -0.35% | |
| JPY | 0.02% | 0.07% | 0.24% | -0.21% | 0.26% | 0.12% | -0.12% | |
| CAD | 0.22% | 0.31% | 0.45% | 0.21% | 0.48% | 0.35% | 0.09% | |
| AUD | -0.24% | -0.19% | -0.04% | -0.26% | -0.48% | -0.15% | -0.40% | |
| NZD | -0.11% | -0.06% | 0.07% | -0.12% | -0.35% | 0.15% | -0.26% | |
| CHF | 0.14% | 0.20% | 0.35% | 0.12% | -0.09% | 0.40% | 0.26% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
This section below was published as a preview of the preliminary print of the University of Michigan Consumer Sentiment for July at 12:30 GMT.
- The Preliminary Michigan Consumer Sentiment Index is expected to rise to 51 in July from 49.5 in June.
- The decline in consumer prices seen earlier this week is likely to have contributed to lifting sentiment.
- A positive surprise on UoM Consumer Sentiment might provide some support to a weak US Dollar.
The University of Michigan (UoM) will release the preliminary estimate of July’s Consumer Sentiment Index on Friday. The UoM report, measuring consumers’ feelings about personal finances, business conditions, and purchasing plans, is expected to show that consumers’ confidence improved for the second consecutive month in July, although remaining at levels well below those before the start of the US-Iran war.
US consumers’ confidence is seen improving to 51 in July, from June’s 49.5 reading, as measured by the UoM Consumer Sentiment Index. These numbers would show some progress from May’s record low of 44.8, but also a considerable deterioration from the 56.6 level seen in February, just before the US and Israel attacked Iran for the first time.
Consumer spending is a key contributor to US economic activity, accounting for about 70% of the country’s Gross Domestic Product (GDP), and the Michigan Consumer Sentiment Index is considered a reliable forward-looking indicator of US economic trends. In that sense, any deviation from the market consensus tends to have a significant impact on US Dollar (USD) crosses.
What to expect from June’s UoM Consumer Sentiment Index report?
Markets will be attentive to July’s consumer sentiment data to assess the extent to which the ebbing inflationary pressures have brightened US consumers’ mood. Oil prices have retreated from the highs seen at the height of the war in the Middle East, and recent numbers revealed that consumer and producer inflation fell beyond expectations in June. It remains to be seen, however, if the macroeconomic trend has reached Main Street.
June’s University of Michigan report highlighted the moderation in gas prices as a key factor in explaining the improvement in consumer sentiment, with business conditions brightening as concerns about the economic consequences of Iran’s conflict apparently start to abate.
Inflation has receded further in the meantime. Crude prices are nearly 30% below the levels seen in April and May, helping ease price pressures.
Recent data from the US Bureau of Labor Statistics revealed that the US Consumer Price Index (CPI) contracted 0.4% MoM in June, its sharpest monthly fall in nearly six years, and that yearly inflation slowed down to 3.5%, the lowest growth rate since March.
US Producer Price Index (PPI) figures, released on Wednesday, confirmed the easing price pressures. Inflation at factory gates contracted against expectations in June, and the yearly PPI eased to 5.5% from a revised 6% in May, when the market was hoping for further acceleration to 6.2%.
On Thursday, US Retail Sales data showed a mild increase, while US Jobless Claims added to evidence that the labour market has stabilized. Putting it all together, the picture shows an improving scenario that might lead to a positive surprise on the UoM Consumer Sentiment data due later in the day.
When will the UoM Consumer Sentiment Index be released, and how could it affect the US Dollar?
The University of Michigan will release its Consumer Sentiment Index, together with the Consumer Inflation Expectations survey, on Friday at 14:00 GMT. The market consensus hints at a moderate improvement from May’s reading, yet at levels significantly below pre-war ones, and nearly 20% below the July 2025 reading.
The US Dollar has been trading lower this week, as investors pared back bets of immediate Federal Reserve interest rate hikes, although the escalation of hostilities in the Middle East is keeping the Greenback supported.
