Data released today showed U.S. Durable goods orders climbed more than forecast in May after slumping the prior month, helping ease concerns on the slowdown in the growth of the U.S. economy.
The U.S. Department of Commerce announced that orders for equipment meant to last at least three years rose 1.9 percent after a 2.7 percent decline the prior month that was less than originally reported.
“Manufacturing is still in expansion mode because exports are still promising and businesses are investing in capital and equipment formation,” Chris Christopher, senior principal economist at IHS Global Insight in Lexington, Massachusetts, , said before the report. “Manufacturing has been the silver lining in a very anemic recovery.”
Meanwhile at the same time, first quarter GDP data were released indicating that the U.S. economy grew at a 1.9 percent annual pace in the first quarter. The increased in the revised GDP was in line with what economists forecasted of a 3.1 percent gain in the prior quarter. The government last month estimated first-quarter growth at 1.8 percent.
The data today was good news for the U.S. Dollar, and gave optimism to investors who were reminded of what Federal Reserve policy makers said as well as Fed Chairman Ben Bernanke said that slowdown in growth is temporary and was due to temporary factors such as high energy prices and disruption in supplies due to the Japan earthquake.
Following the news, USDJPY rose from a low of 80.12 to 80.33. USDCHF also climbed from 0.8336 to a high of 0.8384.