U.S. goods trade deficit widens in September

U.S. goods trade deficit widened less than anticipated in September in the midst of a recovery in exports. The nominal goods trade deficit widened by USD 0.5 billion in September to USD 76 billion, less than what was expected. This was mainly due to a recovery in exports, which rose 2.2 percent sequentially after three straight months of decline. In the meantime, imports rose 1.5 percent sequentially, having gathered decent momentum in the course of this quarter.

Looking into details, much of the rebound in exports was due to industrial supplies, followed by autos and capital goods. Export of foods, feeds & beverages saw another month of decline in line with what was anticipated, and add to evidence that the sharp rise in the second quarter was likely due to front-running ahead of tariffs, stated Barclays in a research report.

On the imports side, the rise was mainly driven by consumer goods and capital goods, which augured well for consumption and business investment respectively.

“We still anticipate that the trade balance will widen in coming quarters due to pressures stemming from the widening budget deficit and GDP growth differentials relative to the rest of the world”, stated Barclays.

At 18:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was highly bullish at 121.814. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex