U.S. industrial production likely to have dropped marginally in July

Industrial production growth is likely to have dropped marginally in July. In the prior month, industrial output grew 0.6 percent. The rise was greatly driven by a rebound of 7.8 percent seen in motor vehicles and parts production, owing to supply disruptions from a major fire at a parts supplier the prior month.

Mining output had marked its fifth straight monthly gain, rising 1.2 percent, as elevated energy prices drove production. However, utilities output had dropped 1.5 percent in June. June’s rise in production nudged capacity utilization back up to 78 percent. In spite of staying slightly below the long-run average of 79.8 percent, capacity constraints are clearly seen in the supply chain, and continue to be supportive of increased investment spending and mounting price pressures. According to a Wells Fargo research report, industrial production is expected to have risen 0.4 percent in July, as compared with 0.6 percent growth seen in the prior month.

“Given the strength of the ISM index, which sits at 58.1 as of July, we expect industrial activity to continue to advance to a level that is more consistent with the positive sentiment being expressed through various manufacturing surveys”, added Wells Fargo.

At 21:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was neutral at 45.2402. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex