"This isn't news that says the economy has lost upward momentum. It is steady as she goes for the economy."
- Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ
It seems plausible that companies and investors are not so confident about future prospects of the world's largest economy even despite bold comments from politicians and policymakers, who consider 2014 to become a ‘breakthrough' year for the economy.
Nevertheless, manufacturers pulled off their purchases in December, as demand for long-lasting goods unexpectedly slumped, reflecting a broad-based retreat that raised concerns over weak investment in early 2014. According to the Census Bureau, orders for durable goods sank 4.3% last month from November, when they advanced 2.6%. Analysts, however, predicted a 1.9% gain. The main downside pressure came from a 17.5% decrease in volatile category of commercial aircraft. The durable goods indicator itself is highly volatile, hence, markets are not reacting that great. Therefore, the EUR/USD pair turned higher only 0.11% to 1.3659, erasing some of Dollar's gains made earlier ahead of the FOMC meeting later this week.
Also Tuesday, a note from Standard Chartered showed the Fed is expected to trim down its monthly purchases by another $10 billion to $65 this week. The Fed usually pays more attention to inflation and unemployment reports, while the condition of manufacturing sector is rarely taken into account.
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