Greenback performs better than expected

US official analysis released on Wednesday points towards a raise in the durable goods figure for July without any forecasts on behalf of this movement. With the corporate spending on the rise, the new result strengthens the sentiment in expectations of a rate hike. Also exceeding expectations, the headline figure went up 2% with an expected decrease of 0.4%; June’s number remains unchanged at 3.4%. Orders for non-military equipment (except planes) ticked upwards with 2.2% after a 1.4% climb the previous month, this being the highest level since June, 2014. The shipments of non-defense capital goods follow the trend, going up 0.6% in July after a 0.9% revised growth in June.

RBNY’s President (Reserve Bank of New York) William Dudley came forward and stated the obvious:  the pressure of a rate hike is not as high as it was a few weeks ago; he reinforces the toll of new economic developments over the possibility of an increase.

The other part of the press releases made by US officials is in line with previous information; Q2’s GDP (Gross Domestic Product) second estimate pushes the economic growth from 2.3% to 3.7%. This comes after a 0.6% economic expansion in Q1. Personal consumption was also revised to 3.1% from the previous estimation of 2.9%. On the other hand, the core PCE (Personal Consumption Expenditure) – inflation benchmark under Fed’s strict supervision – came as expected at 1.8%. The upward trend which we can see over the entire estimated values shows that consumption will probably be able to support US’s economy going forward, along with the stability on the labor market, the growth in income and low energy costs.  This estimate is the second GDP estimate release for Q2 from a total of three. The third one is expected in late September.

Yesterday, the crude had a sharp upward trend, reaching above $40.00 almost breaking the $41.00 threshold gaining almost 5% for the day and getting out from the multi-year low area. Monday though was a rough day for oil, prices dropping at a staggering $37.60.

Despite the oil hike, gold remains unchanged on Thursday, keeping the up the already familiar lack of correlation between the yellow metal and crude oil prices. Their dynamics have nothing in common, but both seem to latch onto the USD – a weak greenback made a gain for both, when the US dollar strengthen the trends were moving lower. As for today, the USD seems to have gone up with 0.6% and gold went lower, but crude prices went high sharply.

It is good to know that, according to market analyses, since Monday gold dropped a little over 4%, while crude prices went up with 8.15%.