A gauge of the mood from investors, consumers or businesses. Analysts will often sum up sentiments as either bullish or bearish. But it may apply to a more detailed analysis of an economy, applying market participants outlook on inflation, employment, spending and other relevant factors.

Sentiment in FX

The currency market is a living, breathing market driven by the choices of individuals. Sentiment drives the market by setting the tone you can attribute to an economy. Since the consumer is the backbone of the economy, reports suggesting consumer confidence give clues to consumer spending habits.

Michigan Consumer Sentiment Survey (the lead consumer sentiment figure) gives a numerical value for consumerâ??s current and future expectations. Should the figure increase, traders may conclude that consumers have a positive outlook and, may potentially lead to factors that will appreciate a currency.