Forex News – University of Michigan sentiment index highest since 2008

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The US dollar jumped against the yen and euro after the University of Michigan gauge of US consumer sentiment printed a higher than expected number for the month of May, to rise to  its highest level since January 2008.

The preliminary reading of the University of Michigan-Thomson Reuters consumer sentiment index climbed to 77.8 in May, up from 76.4 in April and above the 76.0 expected in a MarketWatch-compiled economist poll.

Despite a weak US jobs number from the non-farm payrolls report in April, it appears that declining gasoline prices helped lift consumer sentiment.

“That is good news, and is thematically consistent with the view that the softening in recent labor data has more to do with seasonal pay back than a shift lower in underlying job demand,” said Eric Green of TD Securities.

Gold cut losses and rose from $1,590 where it was just before the data to $1,581.96 within 20 minutes.

USDJPY rose to 79.97 from 79.85.

The Australian dollar rallied, as risk appetite helped lift risk currencies like the aussie. AUDUSD rose to 1.0063 from 1.0037.