U.S. Dollar Gains As U.S. February Factory Orders Rise Less Than Expected

By Tzu-Wen Chen,

THETAKEAWAY: [U.S. Factory Orders Rebounds in February butweaker than forecast] > [Demand for new vehicles and businessinvestment boost manufacturing] > [USD gains againstAUD ]

U.S. factory orders rebounded in February on the back of demand for new vehicles and business investment, rising by 1.3 percent after a revised 1.1 percent decline in January. Orders to U.S. factories have climbed in three of the past four months. The print falls slightly short of expectations, as the median forecast of 60 economists surveyed by Bloomberg News had called for a 1.5 percent increase. Orders excluding transportation equipment increased by 0.9 percent, the most in five months, after declining by 0.5 percent in January.

According to a report released by the U.S. Department of Commerce today, orders for capital goods excluding aircraft and military equipment, a measure of future business investment, rose by 1.7 percent after falling 3.4 percent the previous month. Shipments of capital goods, which are used in calculating gross domestic product (GDP), climbed by 1.4 percent after falling 2.8 percent in January. Meanwhile, booking for non-durable goods, including petroleum, rose by 0.4 percent, while a 1.3 percent increase in unfilled orders signaled a pickup in production.

AUD USD1-minute Chart: April 03 ,2012

Chart createdusing Strategy Trader – Prepared byTzu-Wen Chen

After an initial drop following the data release, the greenback rallied against higher-yielding currencies such as the Australian dollar and New Zealand dollar. The US dollar continued to advance as the weaker-than-expected data pared risk appetite and sent investors back towards the safe haven currency. At the time of this report, the greenback was trading 11 pips higher at $1.0369 against the Aussie.

--- Written by Tzu-Wen Chen DailyFX Research
DailyFX is the forex news and research arm of FXCM, Inc (NYSE: FXCM), which provides currency trading and brokerage services and is an advertiser on TheStreet websites. Any opinions, news, research, analyses, prices, or other information is provided as general market commentary, and does not constitute investment advice. Dailyfx will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Currency trading involves significant risk of loss. Individual authors may hold positions in the currencies discussed in the article.

Original Article: http://www.dailyfx.com/forex/market_alert/2012/04/03/U.S._Dollar_Gains_As_U.S._February_Factory_Orders_Rise_Less_Than_Expected.html

DailyFX is the forex news and research arm of FXCM (NYSE: FXCM), which provides currency trading and brokerage services and is an advertiser on TheStreet websites. Any opinions, news, research, analyses, prices, or other information is provided as general market commentary, and does not constitute investment advice. Dailyfx will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Currency trading involves significant risk of loss. Individual authors may hold positions in the currencies discussed in the article.

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