FOREX ECONOMIC INDICATOR:DURABLE GOODS ORDERS
Durable Goods or Hard Goods are the goods that cannot be consumed in one use. Brick, refrigerator and car etc are the examples of durable goods.Durable goods orders is a strong forex economic indicator that can add or deduct 100 pips while released.
The data of durable goods orders is released by US Census Bureau in every month. Core durable goods orders is the total orders of durable goods excluding transportation equipment. Core durable goods orders has greater importance than durable goods orders in forex trading.
We already mentioned that the relationship of any economic indicator with inflation is the parameter to measure the importance of the economic indicator. Durable goods orders represent the demand for durable goods by the economy. If an economy has large durable goods orders, that means the people of that economy has money at hand after consuming the basic products.
It also represents that the people of that economy have greater number of jobs and much earnings. Durable goods orders also indicates that the economy will need more production in order to fulfill the orders. The healthy production sector will create more jobs and deliver income.
So, durable goods orders indicate that the economy has higher inflation rate, as people have more money at hand after fulfilling basic needs. And when the economy indicates higher inflation forex traders start expecting higher interest rate, and as always, interest expectation is the key in forex trading.
From the above lines, we already know that durable goods orders or core durable goods orders are positive when they are greater than expected and negative when they are lower than expected.
The data of durable goods orders is released by US Census Bureau in every month. Core durable goods orders is the total orders of durable goods excluding transportation equipment. Core durable goods orders has greater importance than durable goods orders in forex trading.
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| Source: libn.com |
We already mentioned that the relationship of any economic indicator with inflation is the parameter to measure the importance of the economic indicator. Durable goods orders represent the demand for durable goods by the economy. If an economy has large durable goods orders, that means the people of that economy has money at hand after consuming the basic products.
It also represents that the people of that economy have greater number of jobs and much earnings. Durable goods orders also indicates that the economy will need more production in order to fulfill the orders. The healthy production sector will create more jobs and deliver income.
So, durable goods orders indicate that the economy has higher inflation rate, as people have more money at hand after fulfilling basic needs. And when the economy indicates higher inflation forex traders start expecting higher interest rate, and as always, interest expectation is the key in forex trading.
From the above lines, we already know that durable goods orders or core durable goods orders are positive when they are greater than expected and negative when they are lower than expected.
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