USD/JPY breaches 115 after US data

Peter Bukov Axiory Global Ltd.

The greenback continued in its bullish regime and the USDJPY pair was up half a percent during the US session on Wednesday, rising to fresh five-year highs at 115.50.

Traders paid attention to the US Durable Goods Orders, which tumbled 0.5% month-on-month (versus +0.2% expected) in October, and September's 0.3% monthly print was revised down to -0.4%.

On the other hand, the value of core capital goods orders, a proxy for business investment in equipment that excludes aircraft and military hardware, rose 0.6% after an upwardly revised 1.3% increase a month earlier.

Core capital goods shipments, a figure used to help calculate equipment investment in the government’s GDP report, increased 0.3% after jumping an upwardly 1.3% in the prior month.

From other news, today’s first revision of the USQ3 GDP data was 2.1%, below the 2.2% expected, if slightly better than the 2.0% initial estimate. In addition, personal consumption rose 1.7% annualized in 3Q after rising 12.0% the prior quarter.

Data also showed that the University Of Michigan's Sentiment rose from 66.8 preliminary to 67.4 final but remains well below the 71.7 in October. However, consumers’ inflation expectations remained at their highest since 2008.

Lastly, the Fed's favorite inflation indicator - Core PCE Deflator - jumped to its highest since 1991 to 4.1%, while the headline PCE rose 5.0% yearly. That is more than twice the Fed’s 2% inflation goal.

The day will be finished with the FOMC minutes from the latest Fed's monetary policy meeting, where the central bank decided to start tapering its bond purchases.

Author

Peter Bukov

Axiory Global Ltd.

Peter Bukov is one of Axiory’s leading analysts. He has a master’s degree in Corporate Finance and is highly sought after as a teacher of Forex trading at various universities in Slovakia.

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