August’s US factory orders were released yesterday and showed an increase of 2.3%. This was a significant about turn from the 0.8% decline we saw in the previous month and better than the 2.1% economists had expected. It is the strongest gain since September 2017 and was led by an increase in aircraft sales. It is yet more evidence that America’s economy is in a strong position, despite ongoing concerns about the trade war with China.
Still, the dollar lost ground against the euro and sterling. Brexit has been the flavour of the day for a while now and comments made to Reuters by a European Union source trumped the positive release from the US. Meanwhile, initial jobless claims up to 29 September 2018 fell by 8,000 to 207,000. This was better than the 213,000 forecast and it is worth bearing in mind that Hurricane Florence is still impacting on the figures.
While there are only one or two minor releases from the UK and eurozone, today is much busier for America, with the balance of trade figures for August set for release. We will also see the all-important non-farm payrolls for September as well as the unemployment rate for the same month. Unemployment is expected to have fallen to 3.8% in September from 3.9% the previous month and, should that prove to be the case, we could see some further dollar strengthening.
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