The EUR/USD is trading at its lowest in three days, hovering around the 1.0430 region, as the US Dollar Index shows strength, nearing 108.00. December saw a significant decline in US Durable Goods Orders, which fell by 2.2%, driven by a substantial $6.3 billion drop to $276.1 billion. The decline was largely attributed to a decrease in transportation equipment orders, which fell 7.4% to $86.1 billion. This unexpected downturn came as market expectations had anticipated an increase of 0.8% in new orders.
Meanwhile, Bitcoin saw a slight recovery, trading above $102,000 after plunging to a low of $97,777 the previous day. The digital currency's rebound was supported by MicroStrategy's strategic purchase of 10,107 BTC for $1.1 billion and the launch of its convertible preferred stock STRK. Gold prices also bounced back, reaching the $2,750 region on Tuesday, recovering from a sharp retracement on Monday. The bounce was influenced by factors including Trump's tariff narrative, a recovery in European stocks, and a better tone in US futures.
The US Dollar Index did not immediately react to the durable goods orders report but was observed rising by 0.5% at 107.93. This indicates the dollar's resilience amidst fluctuating economic indicators. The decline in durable goods orders was further explained by the US Census Bureau.
"Excluding transportation, new orders increased 0.3%," – US Census Bureau
The exclusion of transportation paints a slightly more positive picture of the US durable goods landscape, yet concerns remain with new orders excluding defense decreasing by 2.4%. The driving force behind this decrease has been identified as transportation equipment, which has seen declines in four of the last five months.
"Excluding defense, new orders decreased 2.4%. Transportation equipment, also down four of the last five months, drove the decrease, $6.9 billion, or 7.4%, to $86.1 billion." – US Census Bureau
The broader market implications of these figures are significant. Analysts had been expecting a modest increase in new orders, but the reality has underscored ongoing challenges within the transportation sector and potential wider economic concerns.
Bitcoin's slight recovery is noteworthy amid these economic fluctuations. MicroStrategy's commitment to purchasing substantial quantities of Bitcoin suggests confidence in its long-term value, even as the cryptocurrency market remains volatile. The introduction of STRK stock appears to have provided additional support for Bitcoin's price movement.
Gold's resurgence reflects its traditional role as a safe-haven asset during turbulent economic times. The influences of international trade policies and market conditions have played a critical role in its recent price adjustments.