US January Business Inventories Beats Forecast; USDCAD Bullish
THE TAKEAWAY: [US January business inventories rose by the most since May 2011] > [Businesses increase goods on hand to meet the picking up demand] > [USD/CAD Bullish]
U.S. business inventories in January rose by the most since 2011 and beat the forecast as businesses are restocking with a picking up in consumer demand. The Commerce Department reported in Washington today that stockpiles increased 1.0 percent in January, following anupwardly revised 0.3 percent gain in previous month. The median forecast of 47 economists surveyed by Bloomberg News had projected a 0.5 percent increase in inventories. Meanwhile, sales fell0.3 percent after a gain of 0.1 percent in December.
In specific, inventories in Wholesalers accounting for about 30 percent of all business inventories rose 1.2 percent in January, while retailers’ stockpiles increased 1.5 percent matching gain in sales. The readings indicate that companies replenished warehouses and shelves in line with improving demand.Another report from the Commerce Department showed that US February retail sales jumped by the most in five months. Both reports add more signs to the moderate recovery in U.S. with increasing firmness.
USDCAD 1-minute Chart: March 13, 2013
Chart created using Market Scope – Prepared by Renee Mu
In the minutes following the business inventories report, the U.S. dollar rallied against the major currencies. The USDCADrose by 26 bpsto C$1.0292 within 10 minutes after the data release. Then the greenback retracedslightly and was trading at 1.0283 at the time of this report was written.
--- Written by Renee Mu DailyFX Research
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.