U.S. business inventories stay at lowest level in 11 months in October, signal modest recovery in Q4

Business inventories in the United States declined to its lowest level in almost a year, during the month of October, signaling a modest recovery in inventory investment in the fourth quarter of this year.

U.S. business inventories fell 0.2 percent after being unchanged in September. That was the largest drop since last November, data released by the Commerce Department showed Wednesday. Economists had forecasted inventories to dip 0.1 percent in October.

In addition, inventories at retail stores fell 0.4 percent in October, after remaining unchanged in September. Also, retail inventories excluding autos decreased 0.2 percent in October instead of the 0.3 percent drop reported last month, followed by a 0.1 percent dip in September.

Inventory investment rebounded in the third quarter, contributing half a percentage point to the economy's 3.2 percent annualized growth rate during that quarter. Inventories had weighed on GDP growth since the second quarter of 2015.

Further, in October, business sales increased 0.8 percent after a similar gain in September. At October's sales pace, it would take 1.37 months for businesses to clear shelves, down from 1.38 months in September.

Meanwhile, the dollar index traded at 102.25, up 0.48 percent, while at 6:00GMT, the FxWirePro's Hourly Dollar Strength Index remained highly bullish at 136.63 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex