Here is the key factor to keep in mind today for Euro trades:
- German IFO Report: Forex traders received a big report on the health of the German economy as measured by the IFO report which released three indexes giving a snapshot at the Eurozone’s biggest economy. Economists expected the IFO Business Climate for April to increase to 108.4 from the 107.9 reported in March. The released report came in better than expected and showed an increase to 108.6. The IFO Current Assessment was expected to rise to 112.4 in April from the upward revised 112.1 reported in March. The released report beat expectations as well as it rose to 113.9. This was the biggest positive in today’s German IFO report. Economists also expected an increase in the IFO Expectations to 104.5 in April from the 103.9 reported in March. This report disappointed as the released figure was reported at 103.5. This has slightly dampened the Euro bullishness during the morning session, but overall the Euro may enjoy further upside as more and more economic reports point towards a stronger than expected economy out of the Eurozone.
Here is the key factor to keep in mind today for US Dollar trades:
- US Durable Goods Orders: Forex traders should have grown accustomed by now that the US economy is a lot weaker than many want to realize. More and more economic reports released out of the US point towards a weaker economy. Today’s durable goods orders may follow the same pattern. Economists expect an increase of 0.6% in durable goods orders for March. Forex traders can compare this to the 1.4% contraction reported in February. Even with the expected increase, should it indeed be confirmed, we are looking at a two month average which shows that durable goods orders are contracting by 0.4% per month. Durable goods orders excluding transportation, which can often be volatile as the aerospace industry is very dominant in this report, are expected to increase by 0.3% in March. Forex traders can compare this to the 0.6% contraction reported in February. Combining the previous two month’s will show an average contraction of 0.2% per month. One of the biggest indicators of economic strength is the capital goods orders non-defense and excluding aircraft. This strips out many one-off items and shows the demand of the economy by consumers. Economists expect an increase of 0.3% for March. Forex traders need to compare this to the 1.1% contraction reported in February and then look at the two month moving average which shows a monthly contraction of 0.4%. A big red flag for those hoping a stronger US Dollar will be supported by actual economic strength. Capital goods shipments non-defense and excluding aircraft are expected to increase by 0.3% in March, matching the 0.3% increase reported in February.
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