FOMC Minutes, Durable Goods Orders, New Home Sales and the USD

November 22, 2022 10:36

The USD currency pairs might fluctuate this week ahead of US Durable Goods Orders and New Home Sales trading events. There’s also a chance that global stock markets could come under pressure when the Federal Open Market Committee (FOMC) releases its Minutes and after China locked down public areas because of COVID-19 fears.

USD currency crosses

The USD takes the spotlight on Wednesday when the Durable Goods Orders report for October will be released. Consensus opinion sees a growth of 0.4 percent, unchanged from the previous month. Inflation eased in the US during October and might have supported orders for big-ticket items. At the same time, rising interest rates have dampened investment and spending, so there’s a mixed outlook for the results.

The US housing market comes under scrutiny tomorrow with the New Home Sales report for October. Previously at the level of 603,000 new homes sold, the consensus opinion sees October’s results at 570,000. Factors to consider include the rising interest rate environment in the US which weighs on the demand for mortgages and new homes. Adding to that, the construction sector is vulnerable to inflationary pressures on raw materials, so the report is expected to send signals about the health of the housing market.

The FOMC Minutes release on November 23 could impact the USD currency pairs and stock market sentiment. Recession fears are just under the surface and interest rate hikes have had a significant effect on risk appetite and the value of the US Dollar. Although US inflation dropped in October, the Federal Reserve takes the view that it’s too early to ease monetary policy. The Minutes are expected to provide more clues about the last interest rate decision of the year on December 13-14.

The FOMC’s thoughts could offer insights into the probability of a recession in the US economy. This is linked with China’s relatively slow return to full productivity as the countries are major trading partners.

Crude oil spot prices

A small dip in crude oil spot prices could be connected to recession fears and China’s recent lockdowns. Even though China has eased up slightly on its zero-tolerance COVID policy, the situation is far from the normal levels of productivity and a source of concern about short-term growth prospects in both countries.

Read more about the main market drivers for the USD in November.

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This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.

Sarah Fenwick
Sarah Fenwick Financial Writer, Admirals London

Sarah Fenwick's background is in journalism and mass communications. She has worked as a correspondent covering Swiss Stock Exchange news and written about finance and economics for 15 years.