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U.S. durable goods order likely to have dropped again in May

U.S. durable goods orders had dropped in April, marking the end of a four-month rise. It fell 0.8 percent, but the March’s data was upwardly revised to 2.3 percent on the month. Consensus expectations were for a larger drop as payback for the recent hot streak that did not materialize in the April report.

The subsequent rise in shipments that would logically follow a period of strong orders, also did not materialize, noted Wells Fargo in a research report. Shipments dropped 0.3 percent in April, even after stripping out volatile transportation and defense goods. Non-defense capital goods shipments, excluding air, or core goods, the measure that closely tracks business fixed investment in GDP, was down 0.1 percent.

For the last two months, core goods orders have been flat, casting doubt on a considerable boost to GDP growth from the sector in the next few months. Goods orders are expected to firm even if the hard data have yet to hint a major pickup for the factory sector is imminent, stated Wells Fargo. U.S. durable goods orders are expected to have dropped 1 percent month-on-month in May, added Wells Fargo.

At 21:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was slightly  bearish at -62.388. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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