U.S. durable goods orders likely to have risen in August

U.S. durable goods orders are likely to have risen in August. According to a Wells Fargo research report, the durable goods orders are expected to have grown 1.1 percent, as compared with the fall of 1.7 percent seen in the prior month. The fall of 1.7 percent was larger than anticipated, but could mostly be due to the more than 34 percent fall in civilian and military aircraft orders. Aircraft shipments continued to be consistent with recent trends.

Excluding the aircraft component, there was fairly widespread strength in the durable goods report. Nevertheless, a close attention would be paid to any bounce-back in nondefense shipments in the August report given the BEA includes aircraft in its initial estimate of equipment spending for GDP. Meanwhile, inventories had risen 1.3 percent in July, which was the largest one-month stockpiling since 2011.

“Coming on the heels of a $26.9 billion drawdown in Q2 inventories, even a modest increase in Q3 could add a full percentage point to headline GDP. We expect to see some rebound in August with durable goods orders rising 1.1 percent”, added Wells Fargo.

At 14:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was slightly bullish at 73.6795. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex