Orders rose by a higher-than-forecast 2 per cent following declines in both May and April. Durable goods orders were buoyed by heightened demand for cars and commercial aircraft. However, USD was left under pressure as markets expect the US Federal Reserve to cut interest rates for the first time in a decade next week.
Economists have predicted the Fed will slash interest rates by 25 basis points rather than a more aggressive half-point cut.
Commenting on this, Senior US Economist at Capital Economics, Andrew Hunter said:
“The biggest reason for the Fed to cut rates is because it has been priced into the markets for a while now. If they didn’t follow through and cut, it would cause a bit of a shock.
“I think the recent general message from the Fed seems to be that it’s more about downside risks to growth rather than the economy being already weak.”
Meanwhile, reports showed that new Prime Minister Boris Johnson continued his government reshuffle on his second day as PM.
During his first speech in the House of Commons, Mr Johnson promised his premiership would be the start of a new “golden age”.
Added to this, the PM promised to get the UK out of the European Union by 31 October.
However, he noted that in the “remote possibility” the EU refuses to renegotiate a fresh Brexit deal, he will go for a no-deal.
The GBP/USD exchange rate could gain this afternoon following the release of US Q2 GDP.
While the Fed’s course looks fairly set this month, a poor US growth figure this afternoon would still put USD under pressure.