US Durable Goods Orders Report Favorable, but USD/JPY Losses Persist
- June US Durable Goods Orders came in at +3.4% vs +3.2% estimated (m/m).
- ‘Core’ orders had a +0.8% read vs +0.5% expectation from the prior month (m/m).
- See the DailyFX economic calendar for more US economic data prints in the week ahead.
June US Durable Goods Orders reported a +3.4% m/m change in June beating the +3.2% forecast produced by Bloomberg News’ survey of economists (m/m). Durable Goods excluding transportation - widely viewed as the ‘core’ reading - came in at +0.8% versus +0.5% forecast (m/m). Meanwhile, May’s data print was revised upwards to -2.1% from -2.2% (m/m).
The US Dollar experienced a slight spike on the back of the favorable data against its major counterparts, but the gains were only passing in context of the broader risk-off move developing across the globe at the start of the week. Immediate reaction in the USDJPY pair showed a +8-pip increase in the 1-minute candlestick at 12:30 GMT. The pair stemmed its gain and reaction was ultimately muted. At the time this report was written, the pair was trading at ¥123.16.
Durable goods represent orders placed for long-lasting products (with lifespans typically lasting more than three years) and indicate whether consumers in a market are confident in a long-term investment. A stronger data print may indicate consumers are optimistic about a long-term investment (and thus, their finances) given current labor market dynamics. Durables excluding transportation eliminate bias from busses, aircrafts, or civilian vehicles, which distort the overall data, providing investors with a better measure of consumption.
Here’s a recap of all US economic data for July 27:
Read more: Euro, Yen Rally as Dollar, Equity Markets Slip at Start of FOMC Week
--- Written by Christopher Vecchio, Currency Strategist
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