Business Inventories Rose Less Than Forecasted In July
THE TAKEAWAY: U.S. Business Inventories rose less than forecasted > Wholesale and manufacturing stockpile increased > U.S. Dollar shortly moved upward
Business inventories, which measure the monthly percentage changes in inventories from manufactures, retailers and wholesalers in the U.S., rose less than expected in the month of July. A report released by the Commerce Department today revealed that business inventories increased by 0.4 percent, following the upwardly revised 0.4 percent advance in the previous month. Economists initially called for the reading of 0.5 percent, according to the Bloomberg survey. The index started its downtrend after hitting its record high of 1.3 percent in March and leveled off in July.
U.S. Business Inventories, Monthly Change: January 2009 to Present
Prepared by Trang Nguyen
Wholesale stockpiles and manufacturing stockpiles accounted for 0.4 percent increase in business inventories. In specific, wholesalers’ inventory climbed 0.8 percent, manufactures’ rose 0.5 percent while inventory at the retail level stayed the same with the previous month. Besides, manufacturing sales soared 1.6 percent, retail sales advanced 0.3 percent and merchant wholesales was unchanged. As the combined value of distributive trade sales and manufacturer’s shipment moved up 0.7 percent, the July business inventory/sales ratio fell to 1.27.
USD/CAD 5-minute Chart: September 14, 2011
Charts created using Strategy Trader– Prepared by Trang Nguyen
The five-minute USDCAD chart above showed that the currency pair increased 40 pips from 0.9900 to 0.9940 after the report issued. The greenback shortly strengthened against the loonie as business inventories discontinue the downward trend. Regardless, the figure did not significantly move the markets as it did not reflect personal consumption. The Canadian currency then regained to $0.9916. Since the overall economy expanded merely 0.7 percent in the first half of a year, along with the high unemployment rate of 9.1 percent, concerns that the economy could fall back into recession escalated.
Written by Trang Nguyen, DailyFX Research Team
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.