U.S. Commerce Department said on Tuesday new orders for manufactured goods rose 2.7% after an upwardly revised 0.6% gain in September. That was the largest increase since June 2015 and marked four straight months of gains.
The Commerce Department also said orders for non-defense capital goods excluding aircraft, seen as a measure of business confidence and spending plans, rose 0.2 % instead of the 0.4% increase reported last month. Shipments of these so-called core capital goods, which are used to calculate business equipment spending in GDP report, fell 0.1% in October instead of the previously reported 0.2% rise. We do not think that this release will significantly adjust expectations for fourth-quarter GDP growth. The latest GDPNow from the Atlanta Fed puts the contribution to fourth-quarter growth from business fixed investment in equipment at 0.36-percentage point.
The report added to factory surveys in suggesting an upturn in manufacturing. However, the progress is likely to be limited by renewed dollar strength in the wake of Donald Trump's victory. The dollar's surge against the currencies of the United States' main trading partners between June 2014 and January 2016 helped to undercut manufacturing activity. With the dollar rally having appeared to fade for much of the year, some of the drag had eased.
The USD recovered slightly on Tuesday, but investors are cautious ahead of the European Central Bank meeting on Thursday. The ECB is widely expected to announce an extension to its quantitative easing programme, but there is uncertainty over whether the size of the monthly asset purchases will be kept steady or scaled back, and over whether a formal signal on the eventual end of the asset-purchase programme will be sent. If the ECB does say it will start to scale back its asset purchases the EUR would be likely to rebound strongly against the USD.
Technical analysis supports the EUR/USD with bull hammer on December 5 and monthly RSI biased up. We keep our long position unchanged.
GrowthAces.com - Daily Forex Trading Strategies
The Commerce Department also said orders for non-defense capital goods excluding aircraft, seen as a measure of business confidence and spending plans, rose 0.2 % instead of the 0.4% increase reported last month. Shipments of these so-called core capital goods, which are used to calculate business equipment spending in GDP report, fell 0.1% in October instead of the previously reported 0.2% rise. We do not think that this release will significantly adjust expectations for fourth-quarter GDP growth. The latest GDPNow from the Atlanta Fed puts the contribution to fourth-quarter growth from business fixed investment in equipment at 0.36-percentage point.
The report added to factory surveys in suggesting an upturn in manufacturing. However, the progress is likely to be limited by renewed dollar strength in the wake of Donald Trump's victory. The dollar's surge against the currencies of the United States' main trading partners between June 2014 and January 2016 helped to undercut manufacturing activity. With the dollar rally having appeared to fade for much of the year, some of the drag had eased.
The USD recovered slightly on Tuesday, but investors are cautious ahead of the European Central Bank meeting on Thursday. The ECB is widely expected to announce an extension to its quantitative easing programme, but there is uncertainty over whether the size of the monthly asset purchases will be kept steady or scaled back, and over whether a formal signal on the eventual end of the asset-purchase programme will be sent. If the ECB does say it will start to scale back its asset purchases the EUR would be likely to rebound strongly against the USD.
Technical analysis supports the EUR/USD with bull hammer on December 5 and monthly RSI biased up. We keep our long position unchanged.
GrowthAces.com - Daily Forex Trading Strategies
