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US dollar trades flat on durable goods

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US dollar trades flat on durable goods

The US dollar traded flat against a basket of its peers following a negative release from the US Census Bureau. Durable Goods Orders declined 7.3 percent in July, worse than the expected reading of -3.6 percent. The decline comes after three consecutive monthly increases, including a 3.9 percent hike in June. In total, new orders for manufactured durable goods declined $17.8 billion to $226.6 billion in July. Durable goods excluding autos fell 0.6 percent, compared to expectations for a 0.6 percent hike.

Data on durable goods measure large investments, or goods planned to last three years or more, such as automobiles and appliances. Because durable projects often involve large investments, they are highly sensitive to the current pace of economic activity.

The US dollar index traded in a narrow range before ending the day flat at 81.37. In North America, the USDCAD pair drifted away from 1.0534, the session high, to end the day at 1.0508. The pair advanced more than 1.75 percent last week on weak readings of Canadian GDP and retail sales.

The USDJPY managed to shrug off intraday losses, rebounding to 98.60. The pair closed out the New York session treading water, as the likelihood of a Federal Reserve asset taper looms over the horizon. Despite weaker-than-expected data over the past two trade sessions, analysts don’t expect downswings in new home sales and durable goods orders to affect the Fed’s timetable.

In Europe, the euro was down slightly more than 0.1 percent after rallying on weaker-than-expected new home sales in the US. The EURUSD was trading at the upper end of its fair market range, closing the North American session at 1.3372. The dollar was also supported following the Dallas Fed’s report on Texas manufacturing. The Manufacturing Business Index, which measures factory activity in Texas, was up 0.6 points over the previous month, with an August reading of 0.5.

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