Good News and Bad News…

News coming out of the US was better than expected, but it did little to help the Dollar out of its slump. Strong indicators came in a one-two punch, with Durable Goods Orders posting 3.4 versus the expected 2.8, and New Home Sales posting relatively in line with expectations. The Durable Orders release measures the dollar volume of orders, shipments, and unfilled orders of durable goods. Orders are considered a leading indicator of manufacturing activity, and the market often moves on this report despite the volatility and large revisions that make it an imperfect indicator. These problems can be minimized by looking at the breakdown of orders. The total number is often skewed by huge increases in aircraft and defense orders, and today’s number might have been disregarded because of a major sale from Boeing Manufacturing. On the homes front, the New Home Sales figure indicates the level of new privately-owned one-family houses sold and for sale. New home sales usually have a lagged reaction to changing mortgage rates. They also tend to be stronger early in the business cycle when existing demand is strong, and they fade later in the cycle as the demand for housing is more balanced. In addition to home sales, the market monitors the number of homes for sale relative to the current sales pace. As this inventory measure falls or rises, housing starts tend to work in conjunction. In other notable news, the Dow Jones Industrial Average rose above its benchmark 13,000 level to add a boost to US-based securities. This did nothing to help the Dollar’s price, but it is a significant milestone for securities dealers. As we move into the Asian sessions, the EUR/USD is trading at 1.3635, the GBP/USD is still above 2.0000 at 2.0011, and the USD/JPY is clinging to the 118.17 level. XPRESSTRADE Analyst David Hilgeman