Core Durables came in at .3 vs. .7% expected ....ouch!
Durables as a whole came in - 1.7% vs. +1.6 expected
Sean's take on it:
Last month's numbers were revised downward also. Man, the U.S. dollar just can't catch a break.
So this has pushed EUR/USD back above 1.4300
Are things going to get better anytime soon? More than likely not. Just last night Bank of America announced the layoff of several thousand employees. Motorola posted a loss this quarter in today's announcements. Also, Daimler (Chrysler) announced a loss, etc.
Also, concerning the durables....this tells you that people aren't making big ticket items (washers, dryers, cars, computers, airplanes, etc.) Durable goods are items that are expected to last 3+ years. So you can tell that both corporate spending (airplanes) and consumer spending (cars, computers, washing machines, etc) are both slowing down. So when the money flow is slowing both corporately and residentially, its not a good thing for the U.S. economy.
So what does this mean in currency land? Dollar down as more confidence is lost in its near term economic stability and foreigners remove more assets from the U.S. (selling their stock holdings of these slowing companies, selling real estate, etc) and repatriating their money out of dollars and back into their home land. This makes foreign currencies go up and the dollar go down. Currencies are moved by both economic and sentiment levels. Both right now are in the toilet. So until this picture changes fundamentally, all stock market rallies and dollar rallies should be sold once they start to roll over.
Sean Hyman, Currency Director
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