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US investment impacted by stronger dollar
The US dollar weakened across the board on Friday after data showed that business investment fell in the world’s largest economy.
A report released by the US Commerce Department showed that orders for non-military capital goods excluding aircraft, a proxy for future corporate spending on new equipment, decreased 0.5 percent in March, despite expectations for an increase. This was the seventh month of decline.
Non-defense capital goods orders excluding planes were projected to rise 0.3 percent, according to the Bloomberg survey median. The February reading was revised to show a 2.2 percent slump, the biggest drop since July 2013. The decrease was twice as big as the 1.1 percent decline previously reported.
The stronger dollar is clearly starting to show the effects on manufacturers whose goods will now become more expensive abroad, especially in a weaker global market.
The impact of the weak data on the US dollar was quite negative, with USD/JPY tumbling to 118.82 yen on Friday and extending lower on Monday to 118.76.
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