FXStreet (Barcelona) - Derek Halpenny, European Head of Currency Strategy at the Bank of Tokyo Mitsubishi UFJ, observes the performance of the USD post-yesterday releases.
"The negative momentum in EUR/USD specifically is also being fuelled on the dollar side with the data from the US yesterday solid once again. The durable goods orders report revealed a decent underlying picture once the noise of transport is stripped away."
"The capital goods orders, ex-air and non-defense fell 0.5% in July but this was after a hefty upward revision to June to a gain of 5.4%. The 3-month average annualised rate has been over 11% for three consecutive months."
"Shipments of capital goods are also running at impressive rates as well with the same 3-month average measure running at over 7% for three consecutive months. These underlying details suggest the scope for positive momentum in the capex side of the economy in H2 is notable."
"Finally, consumer confidence defied expectations of a drop rising to 92.4, the highest since October 2007. The expectations component did drop but this was more than offset by the rise in the current conditions component. The jobs plentiful minus hard to get jumped to -12.4, the highest since May 2008."
"The 10-year UST bond-German bund spread is now at 145bps and this historically has been a strong dollar buy signal. A widening spread to these levels was last in place way back in 1999, the early stages of a very strong dollar buying period."