How does it affect forex?

Inventory accumulation during a sluggish economic period may force producers into offloading unwanted inventories. Such a move will no doubt affect the manufacturer a great deal since some expense will have been incurred in the production and again it may force the producers to cut down production. While a slower production may be good news for bond market since it thrives on low interest rates, foreign exchange investors will see a weaker dollar as a result. Sudden accumulation of business inventories may also mean the beginning of a recession.
If business inventories accumulation persists. It is obvious that the export and import business will be greatly affected leading to a possible trade imbalance. The trade imbalance will then directly affect the strength of the dollar. On the other hand if business inventory figures decline drastically, the dollar may see renewed demand although too sudden a decline in business inventories may also signify an eminent increase in inflation levels.