Taking a look across the board, the US dollar has rallied against major currencies on the heels of additional US recovery signs. Although trend momentum is always questionable, the current rally may have sturdy legs this time around. These three reports point to just such an event.
Housing Sector Gains
According to the most recent S&P Case-Shiller housing index, housing prices rose once again year over year in September. Survey findings bolstered claims that the housing sector is quickly becoming a boon for US recovery notions, rising 3% in the period.
This advance is now the fourth monthly gain for the report and has been noted in boosting confidence in both consumer and construction sectors. Recent gains continue to been seen as a by product of the lowest mortgage rates in 30 years, as the benchmark 30-year fixed rate remains at just a hair above 3.3%. And, rates aren’t expected to rise any time soon with a Fed decision that will extend its current monetary easing measure, buying up to $40 billion a month in mortgage bonds.
Capital Goods Surge
In another optimistic sign, corporate capital goods investments soared in the month of October according to Commerce Department data. The largest surge since the first half of 2012, the 1.7% increase in capital goods investment is a sign that companies have reconsidered their previously pessimistic situations. This is particularly encouraging in the face of the impending fiscal cliff and may indicate a turn in the US economy – dollar positive.
The figure reinforces notions of a recovery that is emerging in the country’s manufacturing sector.
Manufacturing Sector Stabilizes
In a surprise turn of events, manufacturing activity jumped in the Richmond area in November. Although not an area usually associated with output, the area showed some interesting upticks – leading to a better than anticipated report. The headline result was supported by a surge in new orders and shipment as both jumped from negative figures to print a positive 11 reading in the month. Employment additionally improved, rising to a 3 from a -5 release. Now, the second gain in the last three months, the report sheds a potential silver lining as the sector had previously been seen as slumping for the long haul.
All three positive reports add to mounting evidence that the US economy may be on track for a better than anticipated recovery this year. This notion will continue to power the greenback higher against other currencies, especially ahead of the GDP report later this week.