Adding salt to the wound, the Dollar was hurt more today following disappointing report on U.S. Durable goods orders.
Bookings for U.S. durable goods unexpectedly dropped in June and inventories climbed at the slowest pace in a year, as demand for business equipment dropped giving evidence that companies lost confidence in the country’s economic recovery.
Durable goods include goods that are meant to last for at least three years. Data from the U.S. Commerce Department indicated a drop by 2.1% in June versus a gain of 1.9% in May. Economists surveyed by Reuters projected a 0.3% increase. This is “core” durable goods meaning orders excluded transportation equipment.
What has affected manufacturers is a slowdown in consumption as American consumers are spending less. So factory production is expected to cool down. Also, employers aren’t hiring as much, and the cutback in jobs may further dampen household demand, which accounts for 70 percent of the U.S. economy.
“There’s been a clear slowing in orders,” said James O’Sullivan, chief economist at MF Global Inc. in New York. “There’s not a collapse, but certainly this, along with other data in general, have shown a pretty sluggish pace of growth in the second quarter.”
Factories were hoping for orders to pick up pace after the slowdown following the shortages caused by Japan’s earthquake, but today’s data indicates the contrary.
Since release of the data at 12:30 GMT, USDCHF fell from 0.8027 down to 0.7996 by 14:30GMT.