The US dollar fell against the euro and the Canadian dollar on Monday, to begin a week busy with major economic releases on a negative note. The greenback weakened in the wake of a disappointing reading for the growth of durable goods orders today, which further signaled a loss of economic momentum that weighed on the US dollar in recent weeks.
New orders for durable goods manufactured in the United States decreased in May, according to a report released by the US Census Bureau at 12:30 GMT today. Durable goods orders lost $2.5 billion or 1.1% last month to $228.2 billion from $230.7 billion in the previous month, which was a stronger drop than the 0.6% decline that analysts had expected. This marked the second monthly drop in a row following a 0.9% decrease in April.
The report added that core durable goods orders, which excludes transportation, rose 0.1% in May, despite forecasts of a 0.5% gain. Excluding transportation items from orders for long lasting manufactured goods provides a clearer picture of ordering trends, since aircraft orders change volatilely from one month to another. Transportation equipment dropped $2.7 billion or 3.4% to $75.4 billion to lead losses in May.
Nondefense capital goods orders declined $1.7 billion or 2.4% to $68.3 billion last month, while defense new orders for capital goods decreased $0.8 billion or 8.2% to $9.2 billion, the report stated. Durable goods orders decreased 0.6% in May after excluding defense items. Todayâs report also revised Aprilâs new orders from an initial reading of $469.0 billion down to $468.7 billion.
US Economic data has been on a negative trend in recent weeks, which undermined the ability of the US dollar to rise on the back of a tighter monetary policy from the Federal Reserve. The probability of an interest rate hike from the Federal Open Market Committee before the end of the year is highly sensitive to upcoming economic releases. However, the Citigroup Economic Surprise Index revealed last Friday that the US economic data momentum reached the lowest level in 6 years.
Looking ahead, data for consumer confidence from the Conference Board will be released on Tuesday, ahead of a speech by Federal Reserve Chairwoman Janet Yellen on the same day. Wednesday will bring a report on pending home sales from the National Association of Realtors, before the Bureau of Economic Analysis publishes its final reading for gross domestic product in the first quarter on Thursday. The weekâs last major economic release, which will be a new reading for the core personal consumption expenditure index, will be published on Friday.
EUR/USD rose to 1.1212 as of 14:50 GMT on Monday, after touching 1.1216 at 14:45 GMT, a level last seen on June 15. EUR/USD began the week at 1.1195. USD/CAD dropped to 1.3242 from 1.3215 at 13:15 GMT, the lowest level since June 23. USD/CAD was at 1.3264 when the day started.
The Dollar Index, which tracks the performance of the US currency against a basket of its major peers, dropped to 97.15 as of 14:46 GMT today from 97.26 on Friday.
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