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The US Census Bureau is about to launch its monthly data release on durable goods orders for the month of February and analysts expect the data to have a significant impact on the EUR/USD currency pair.
Analysts are particularly keen on witnessing how the latest figures for durable goods orders will affect the EUR/USD pair due to the current events. This is especially with regards to the mountain concerns over the COVID-19 pandemic, which has undoubtedly affected the fabric of social order and also shaken the global economy.
The effect of the coronavirus on durable goods orders data
The upcoming data on durable goods orders will likely be lower than the data released for the previous months, especially on account of COVID-19’s negative impact on trade. The durable goods orders refer to the order costs that manufacturers receive for making durable goods, and it is used as a yardstick for production activity in the U.S.
Positive data on durable goods orders will likely cause a stronger dollar, and thus the EUR/USD currency pair would turn bearish as the dollar grows stronger against the Euro. The reverse would occur if the data indicates lower performance in February versus January’s performance. The COVID-19 situation may have hurt supply and production activities, and thus we might see negative data.
Estimates already point towards a decline
Consensus estimates suggest that February’s data on durable goods orders will drop by 0.8% compared to the -0.2% data reading that was released for January. If the actual data will be lower than that of January, then we might see a slight decline in the value of the dollar. The movement on the EUR/USD pair might thus be slightly bullish.
The above scenario is, however, not expected to have a major impact on the performance since the major influence comes from the coronavirus, which is currently a global issue. Wednesday’s trading session kicked off with a slightly bearish performance as the U.S dollar gained some strength over the Euro.