US: Industrial Production expands 0.4% in August

Industrial Production in the US expanded 0.4%, surpassing expectations of a 0.1% gain.
July numbers were revised lower from 1% to 0.7%.
US Dollar retreats modestly after the data.

Matías Salord FXStreet

Industrial Production in the US expanded by 0.4% in August, surpassing the 0.1% of market consensus. July numbers were revised lower from a 1% increase to 0.7%.

Key takeaways from the report:

Industrial production increased 0.4 percent in August, and manufacturing output inched up 0.1 percent. The August reading for manufacturing was held back by a drop of 5 percent in the output of motor vehicles and parts; factory output elsewhere rose 0.6 percent.

At 103.5 percent of its 2017 average, total industrial production in August was 0.2 percent above its year-earlier level.

Capacity utilization moved up to 79.7 percent in August, in line with its long-run (1972–2022) average.

Manufacturing output rose 0.1 percent in August for its second consecutive monthly gain but was 0.6 percent below its year-earlier level.

Capacity utilization for manufacturing remained at 77.9 percent in August, a rate that is 0.3 percentage point below its long-run (1972–2022) average.

Market reaction

The US Dollar edged lower after the report, with the US Dollar Index (DXY) dropping below 105.30. Meanwhile, EUR/USD rebounded back above 1.0660. Later in the day, the University of Michigan will release its consumer confidence survey.

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

AUD/USD edges higher as hot CPI inflation and hawkish RBA lift rate hike bets

The AUD/USD pair gathers strength to near 0.7035 during the Asian trading hours on Friday. The Australian Dollar edges higher against the US Dollar as hotter Australian CPI inflation data has bolstered expectations of Reserve Bank of Australia rate hikes.

USD/JPY meets support near 157.00

USD/JPY retreats for the third consecutive day on Friday, revisiting the 157.00 region before attempting some recovery as investors continue to assess the latest BoJ meeting, where the central bank left rates unchanged, as widely anticipated.

Gold sinks to fresh yearly lows despite risk-off mood as Fed rate hike bets weigh

Gold slips to fresh year-to-date lows on Friday. The metal struggles despite a risk-off mood across markets, as expectations of further Federal Reserve (Fed) interest rate hikes continue to dominate price action, leaving Gold on track to end the month in negative territory.

Ripple Price Forecast: XRP bulls defend $1.20 as sell-side pressure triggers liquidations

Ripple (XRP) trades around $1.25 on Friday, rising from a short-term support level established at $1.20. This minor upward correction follows a sharp sell-off, triggered amid reports of a hack attack on the Binance exchange that impacted approximately $6.3 billion. The attack drove the broader crypto market on edge, as Binance suspended both deposits and withdrawals to contain the situation.

BoJ recap: A pause for now... but Japan has entered a new inflation phase

The Bank of Japan left its short-term policy rate unchanged at 1.25% but delivered a distinctly hawkish message on the risk of an inflation overshoot. The decision passed by 8-1, with board member Takata dissenting in favour of an increase to 1.5%, while Governor Kazuo Ueda stressed that the Bank would continue adjusting policy as needed.

The 2% inflation target came from a throwaway remark. It now moves trillions

The Federal Reserve's 2% inflation goal grew out of an off-the-cuff remark by a New Zealand politician in 1988. Bond investors still price long-term US debt as if 2% holds, so a change in how the Fed measures inflation would move markets.