THE TAKEAWAY: U.S. Factory Orders Surprises > Demand for Automobiles Rises > USD Gains
A report issued today by the Commerce Department showed that orders placed with American factories rose by the most in four months in July. Orders rose by 2.4 percent last month, beating the 2.0 percent forecast, according to a Bloomberg News survey. The figure for June was revised higher, to -0.4 percent from -0.8 percent, as originally reported.
As speculated by industry experts, the supply side disruptions as posed by the natural disasters in Japan were expected to have abated by mid-summer, and indeed they have. Vehicle orders climbed the most since January 2003, as indicated by the report for July. On the other hand, the spike in orders could be short lived, as overall growth declines and consumer confidence falters.
USD/CAD 1-minute Chart: August 31, 2011
Charts created using Strategy Trader– Prepared by Christopher Vecchio
Following the release, the USD/CAD pair initially moved lower, dropping by approximately 10-pips, before rallying by 40-pips, at the time this report was written. Despite the bullish data for the U.S. economy, risk-appetite began to take a hit, with the commodity currency block starting to pull back after the report.
Written by Christopher Vecchio, Currency Analyst
To contact the author of this report, please send inquiries to: cvecchio@dailyfx.com
Follow Christopher Vecchio on Twitter: @CVecchioFX
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