Durable goods order preview

Today Durable goods order to be released from US at 12:30 GMT and it is to provide further guidance on Dollar.

Federal Reserve Bank of San Francisco, published a paper arguing that first quarter weakness in US economy is temporary and due to residual seasonality effects. That means all second quarter data turns vital, to gauge progress on US economy and whether the recent weakness is temporary.

What are durable goods?

• Durable Goods Orders, released by the US Census Bureau, measures the cost of orders received by manufacturers for durable goods, which means goods planned to last for three years or more, such as motor vehicles and appliances. As those durable products often involve large investments they are sensitive to the US economic situation.

Past trends -

• After solid growth in 2014, goods orders growth excluding transport has fallen to negative territory since October 2014. In March, though durable goods orders grew at 4%, orders excluding transport was in negative territory. (-0.2%).

Expectation today -

• Today for the first time since October Durable goods orders are expected to grow excluding transports. Median estimate at 0.4% and -0.4% including transports.

Impact -

While a positive number would provide the necessary boost to push dollar higher, however negative number would pose challenge for the bulls. However Dollar bulls are most likely to shrug off any weakness in the data, until it's too large. Dollar index is currently trading at 97.03, up 0.70% for the day.