Best Forex Brokers:Durable Goods and the Forex Market Forex traders, like all investors in the big investment markets, pay close attention to the economic news of the day. Thats because economic data (or economic indicators) often shapes trading, whether its on the stock market or the currency market. One of the more common economic indicators that are utilized by Forex and other investors is the durable goods report. Choose the Best Forex Brokers Right Now! topforexbrokerscomparison Defining durable goods Before discussing the actual report, the term durable goods needs to be explained. Durable goods are those goods that last more than three years. In other words, the consumer expects to make a purchase that wont have to be replaced in the near future. Examples of some durable goods are automobiles, furniture, appliances, tools, and factory equipment. The durable goods report The durable goods report is released about the 20th of each month for the prior months activity. The report measures the number of newly placed orders on durable goods from a sample of over 4,000 manufacturers in roughly 85 industries. Usually, defense and transportation figures are deleted from the report due to their volatility. This report is vital to investors since its considered to be one of the major leading indicators for the economy. That means if figures are strong (i.e. high number of orders), then consumers will more likely purchase more durable goods, which will strengthen the domestic currency. On the other hand, if the durable goods number decreases, then consumers will more than likely purchase less goods, which can negatively affect a countrys currency rate. Non-defense capital goods In addition to other numerous breakdowns of durable goods orders, this report also reflects orders of non-defense capital goods. Non-defense capital goods refer to those orders for non-defense related capital equipment orders. This is an important piece of information since its basically equivalent to the producers durable equipment (PDE) category in the all-important GDP economic indicator. Just like other categories, this PDE-like category is a strong indicator for future economic trends. If the non-defense capital goods figure increases, thats a good sign that the economy is growing (positive affect on a countrys currency rate). On the other hand, a decrease in orders can signify an impending downturn in the economy. Choose the Best Forex Brokers Right Now. Start Your Forex Trading Journey! topforexbrokerscomparison
Posted on: Fri, 16 Jan 2015 03:13:18 +0000
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