Durable Goods Orders in the US increased by 3.1% in January, totalling $286 billion, according to the US Census Bureau. This rise follows a 2.2% drop in December and exceeds the market expectation of a 2% increase.

Excluding transportation, new orders were nearly unchanged; however, orders excluding defence grew by 3.5%. Transportation equipment, which had previously seen two consecutive monthly decreases, contributed significantly by increasing by $8.6 billion or 9.8%, reaching $96.5 billion.

Despite these figures, the US Dollar’s valuation remained relatively unaffected, with the US Dollar Index up 0.16% at 106.65.

What we see here is a rebound in durable goods orders following the decline in December, which suggests there has been renewed activity in manufacturing. The 3.1% increase exceeded expectations, indicating a stronger-than-anticipated demand for long-lasting goods. However, when excluding transportation, orders were essentially flat, meaning the overall increase was largely driven by that sector. The sharp rise in transportation equipment orders, which were up by nearly 10%, was the driving force behind this recovery.

That said, defence-related orders did not weigh down the numbers, as figures excluding defence rose by 3.5%. This points to a recovery in commercial and consumer segments, rather than military spending artificially boosting the total. Traders should take note that this type of breakdown helps clarify whether demand across different sectors is broad-based or narrowly concentrated.

Despite these figures, the currency did not see much movement, with the US Dollar Index posting only a modest 0.16% gain. This suggests that markets were largely prepared for an increase, or that other macroeconomic factors held greater influence on the dollar. With this in mind, those involved in derivatives trading should not assume that strong data points alone will move the currency, particularly if market expectations have already factored them in.

Looking ahead, future readings on economic health, such as upcoming manufacturing surveys and employment reports, will help determine whether this increase was an isolated rebound or the start of a sustained trend. The lack of reaction in the dollar also means that traders may need to look beyond headline figures and consider broader economic conditions before adjusting positions.