USD Little Changed after Industrial Production Unexpectedly Fell 0.1% in May
THE TAKEAWAY:Industrial Production Unexpectedly Fell 0.1% in May> Less Factory Production Suggests Slow Recovery in the World’s Largest Economy in Coming Months> USD Little Changed
Industrial production in the United States unexpectedly declined 0.1 percent in May on slower manufacturing production and a decline in automobile output. The figure is contrast with consensus forecast asseventy-nine economists polled by Bloomberg survey had called for an increase of 0.1 percent. Meanwhile, April total output has downwardly revised to a gain of 1.0 percent from an increase of 1.1 percent initially reported. Additionally, capacity utilization for total industry fall 0.2 percentage point to 79.0 percent last month, 1.3 percentage points lower than its long-run average from 1972 to 2011.
Manufacturing output, which accounts for more than 70 percent of industrial productions, declined 0.4 percent in May after having jumped 0.7 percent in the previous month. The decline resulted from a contraction in the production of both durable goods (-0.5%) and nondurables (-0.2%). In contrast, mining output soared 0.9 percent in the month, mainly due to gains in crude oil extraction and coal mining. The output of utilities also advanced 0.8 percent, following a surge of 5.3 percent in April.
In terms of market groups, the production of consumer goods fell 0.2 percent, contrast with 1.4 percent gain in April. The fall was primarily triggered by 1.9 percent decline in the production of automotive products. Similarly, the output of appliances, furniture, carpeting and miscellaneous consumer durables all declined. On the other hand, the production of consumer energy rose, suggesting stronger electricity sales to households and higher output of fuels.
USDJPY 1-minute Chart: June 15, 2012
Chart created using Strategy Trader – Prepared by Trang Nguyen
U.S. dollar traded mixed in the North American session today, the reserve currency advances versus euro and Canadian dollar but weakens against high-yielding currencies, pound and yen. Market participants showed fairly muted reaction after the disappointing industrial production report. As can be seen from the one-minute USDJPY chart above, the currency pair traded within a tight range from 78.64 to 78.70 in the minutes following the release.
--- Written by Trang Nguyen, DailyFX Research Team for DailyFX.com
To contact Trang, email email@example.com
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.