US: Factory Orders rise by 1.6% in May vs. 0.5% expected

Factory Orders in the US increased at a stronger pace than expected in May.
The greenback continues to outperform its rivals after the data.

Eren Sengezer FXStreet

The data published by the US Census Bureau revealed on Tuesday that new orders for manufactured goods, Factory Orders, rose by 1.6%, or $8.4 billion to $543 billion in May. This print followed April's increase of 0.7% and came in much better than the market expectation for a growth of 0.5%.

"Inventories, up twenty-one of the last twenty-two months, increased $10.0 billion or 1.3%, to $797.9 billion," the publication further read. "This followed a 0.8% April increase. The inventories-to-shipments ratio was 1.47, unchanged from April."

Market reaction

The US Dollar Index extended its impressive rally in the early American session and was last seen trading at its highest level since December 2002 at 106.60, rising 1.4% on a daily basis.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

AUD/USD sticks to neutral bias above 0.7100 amid cautious markets

AUD/USD holds steady above 0.7100 in the Asian session on Monday as the US Dollar stalls its modest pullback from the highest level since late July amid persistent geopolitical uncertainties. The PBOC status quo on Loan Prime Rates also weighs on the Aussie. However, bets on another RBA rate hike continue to underpin the Australian Dollar ahead of the Trump-Xi Summit.

USD/JPY eases below 157.00 amid looming intervention risks

USD/JPY is easing back below 157.00 in Asia on Monday, undermined by modest Japanese Yen strength amid looming intervention risks after Friday's BoJ rate check. A Japanese holiday also keeps traders on edge amid escalating geopolitical tensions between Russia and Ukraine and in the Middle East. As a result, the US Dollar pauses its pullback, limiting the pair's downside.

Gold remains depressed below $4,400 as hawkish Fed, Mideast jitters support USD

Gold struggles to capitalize on its recovery gains registered over the past two days and attracts fresh sellers at the start of a new week on Monday. The risk of a broader Middle East conflict helps the safe-haven US Dollar stall Friday's retracement slide from the highest level since late July. Moreover, the Fed's hawkish outlook supports the buck and keeps the non-yielding bullion depressed below $4,400.

The week ahead: Hawkish Fed sets the tone for flash PMIs, SNB decides on policy

The US dollar outperformed all its major peers this week, putting it on the front foot in anticipation of a hawkish Fed before Wednesday, and accelerating its advance after the central bank satisfied the hawkish market bets.

Houthis claim attacks on Saudi capital, thick smoke seen near Riyadh airport

Yemen’s Houthis said that they attacked “sensitive” sites in the Saudi capital Riyadh with missiles and drones, hours after flames and a large plume of smoke were seen near the city’s main airport, the Guardian reported on Saturday. Saudi Arabia sent alerts overnight warning of potential danger around Riyadh.

BoJ Recap: Not as hawkish as expected

The Bank of Japan (BoJ) raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks.