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US Durable Goods Could Move Forex Market

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US Durable Goods Could Move Forex Market

Tomorrow’s report on US durable goods could show new orders expanded sharply in March, a sign the US economy was emerging from its winter freeze at the end of the first quarter.

A median estimate of economists say durable goods orders rose 2 percent in March, with core durables rising 0.6 percent.

If accurate, March would mark the second consecutive month durable goods orders expanded. The Commerce Department reported last month orders for manufactured goods meant to last three years or more increased 2.2 percent in February, offering hope the broader economy was improving after the winter slowdown. Durables had fallen 1.3 percent at the start of the year, official data showed.

The US dollar was little changed Wednesday, reflecting the forex market’s broader hesitation ahead of Thursday’s key reading. In the afternoon session the US dollar index was down 0.1 percent at 79.84.

The greenback retraced most of its gains against its Canadian counterpart. The USDCAD pair was consolidating at 1.1032 after hitting a session high of 1.1055.

The EURUSD rebounded from a daily low of 1.3801 to trade at 1.3818 in the afternoon session, reflecting a gain of 0.1 percent. Sterling fell 0.3 percent versus the greenback following the release of the Bank of England meeting minutes, which raised concerns about the widening UK current account deficit. The GBPUSD pair consolidated at 1.6775.

The US durable goods report could significantly impact US dollar pairs. The markets will use the report as a short-term guidepost of the US economy, which has faced a mixed bag of economic data recently. Strong retail sales, industrial output and employment have been partially offset by a struggling housing sector. The sale of new US homes fell to an eight-month low in March, a sign the housing recovery was struggling to gather pace at the end of the first quarter.

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