The U.S. Dollarstrengthened following the release of a poor durable goods report. Economistswere looking for a 1.0% increase; the actual change was reported as -1.0%.Investors did an about face following the release of this data, buying theDollar and selling higher risk currencies.
The U.S. Dollar strengthened following therelease of a poor durable goods report. Economists were looking for a 1.0%increase; the actual change was reported as -1.0%. Investors did an about facefollowing the release of this data, buying the Dollar and selling higher riskcurrencies. The drop in equity markets also contributed to the strength in theDollar. After the bearish report and the initial reaction, the Dollar settledinto a range against most major currencies.
The Beige Book was just released. Theconsensus is the report paints a weak picture for the economy. The market isreacting as if it was a non-event. The reason for the flat reaction may havebeen that this news has already been factored into the markets since economicreports have been weak and Fed Chairman Bernanke has stated to expect weakemployment and slow GDP growth.
The tone in the market appears to bepro-Dollar today which could set up for a rally late in the session once thecurrency pairs breakout of their trading ranges.
Overnight Australia reported a lower thanexpected rise in its Consumer Price Index. This is a strong indication that theReserve Bank of Australiais going to refrain from hiking its benchmark interest rate. Traders sold theAussie on the news. Weaker U.S.equity markets helped maintain the weaker tone in this market.
