Forex News – US durable goods orders fell in August

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The euro made some losses against the U.S. dollar after data on U.S. durables goods orders fell more than expected last month, fueling some risk aversion.

The euro slid as low as $1.3612 from $1.3651 within a few minutes of the news and USDJPY jumped to 76.51 from 76.40. It may seem paradoxical that the dollar rose on bad news but the dollar is perceived as a safe haven currency when risk sentiment is low due to its high liquidity.

Durable goods orders in the United States slipped in August due to slowing demand for motor vehicles.

The data compiled by the US Commerce Department showed durable goods orders declined 0.1 percent after an unrevised 4.1 percent jump in July. Economists had forecast orders to remain flat (zero percent increase).

Durable goods are defined as hard products having a life expectancy of more than 3 years, such as automobiles, computers, appliances, and airplanes. The data is a leading indicator of production and health of the economy.

A breakdown of the data indicate that there was an 8.5 percent drop in orders for motor vehicles, which was the largest decline since February last year.

Excluding transportation, orders also slipped 0.1 percent after rising 0.7 percent in July. Economists had expected this category would also be unchanged.