Consumer Sentiment News Set to Impact Dollar

Risk taking in the marketplace following better than expected US news led to a mixed trading session for the US dollar yesterday. On the one hand, the greenback advanced to a new one-month high against the Japanese yen at 79.39 during mid-day trading. The dollar eventually staged a minor downward correction before stabilizing at the 79.25 level. On the other hand, higher yielding currencies, including the Swiss franc, were able to capitalize on the positive US news. The USD/CHF fell more than 80 pips to trade as low as 0.9709 by the end of the European session. Turning to today, the US Prelim UoM Consumer Sentiment figure is forecasted to generate dollar volatility during afternoon trading. Analysts are currently predicting today's news to come in at 72.5, which if true, would represent a slight improvement over last month's figure and may signal to investors that the US economic recovery is gaining momentum. In such a case, the dollar could see bullish movement against the yen before markets close for the weekend.

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