Thursday, 11 Mar 2010

Trade Deficit Report Gives USD a Boost

The Dollar recorded moderate gains in trading today following the most recent U.S. Trade Deficit Report, released earlier this afternoon. The report unexpectedly showed a decrease in the U.S. trade balance, with both imports and exports falling over the last month. It appears that while U.S. customers have become slightly more cautious in their discretionary spending, resulting in a drop in imports, international consumers have also become more pragmatic when buying American products abroad.

The Dollar was able to capitalize on the unexpected results, and subsequently recorded gains against the Euro and Pound. The trade deficit figure could not help the greenback against the Yen though. USD/JPY fell throughout the afternoon, reaching as low as 90.35. The pair has since rebounded slightly and is trading around the 90.60 level.

Tomorrow, forex traders will want to pay attention to a number of key economic indicators. The monthly U.S. Retail Sales and Core Retail Sales reports are likely to influence USD pairs. Additionally, the Canadian Unemployment Report is likely to have a significant impact on the loonie.