U.S. advance trade goods deficit widens in July

The U.S. advance trade goods deficit widened in July. The goods trade balance came in a deficit of USD 65.1 billion, as compared with the consensus expectations of a deficit of USD 64.5 billion. Barclays, in a research report, noted that the trade goods balance was consistent with their expectations of a deficit of USD 64.9 billion.

Exports dropped 1.3 percent in the month, driven by weakness in the industrial supplies, automotive and consumer goods, which fell 1.1 percent, 8 percent and 4.5 percent respectively. However, imports dropped by less 0.3 percent as drops in industrial supplies and automotive were countered by a 2 percent rise in capital goods imports and a comparatively unchanged reading on consumer goods. The fall in consumer and capital goods imports are in line with the view of ongoing expansion in the U.S. economic activity, led by household and business spending, stated Barclays in a research report.

Meanwhile, the wholesale inventories grew 0.4 percent, as compared with the expectations of a 0.3 percent rise; however, this outperformance was more than countered by weaker retail inventories that fell 0.2 percent sequentially.

“Taken together, the trade and inventory data pushed our tracking estimate of Q3 GDP lower by one-tenth, to 2.6 percent”, added Barclays.

At 16:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was slightly bearish at -71.7859. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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