U.S. factory orders fall sequentially in July

Factory orders in the U.S. dropped sequentially in July. On a month-on-month basis, factory orders fell 0.8 percent, owing to a sharp fall in durable goods orders. The outturn was widely consistent with expectations. Orders for non-durables, which rose just modestly by 0.2 percent. Within durable goods orders, much of the drop was driven by aircrafts & parts, a volatile category.

Therefore, any negative signal is not drawn from this outcome, noted Barclays in a research report. Meanwhile, orders for core capital goods were upwardly revised in the final estimate and are now reported to have grown 1.6 percent in July, the fourth straight month of strong growth.

Shipments of core capital goods were also upwardly revised in the final estimate. Overall, while the headline reading on factory orders was subdued, the underlying momentum in orders and shipments of core goods continues to be solid.

“On the inventories side, there were upward revisions to manufacturers’ inventories of durable and non-durable goods, which raised our estimate of inventory accumulation. Taken together, our Q3 GDP tracking was boosted by a tenth, to 3.0 percent, after rounding”, added Barclays.

At 17:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was highly bearish at -104.233. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex