Save US U-Michigan Consumer Sentiment vs. DXY Index

UM consumer sentiment index has a correlation coefficient of 0.67 with the US dollar index. Consumption accounts for nearly 70% of American GDP. UM consumer sentiment surveys on people's intention to purchase large durable goods, which is the driving force behind consumption in the long term.

When UM consumer sentiment falls, Fed is expected to enact loose monetary policies to support consumption of durable goods. And Fed easing usually lays pressure on the dollar.