U.S. trade deficit narrowed in the month of February, owing to a rise in aircraft exports and a subdued rise in imports. The trade deficit narrowed to USD 49.4 billion from January’s deficit of USD 51.1 billion. Exports grew strongly by 1.1 percent, with a significant rebound in civilian aircraft after a depressed January. However, this export category is expected to soften in months ahead, noted Wells Fargo in a research report. Decreased production and a halt in Boeings’ 737 MAX deliveries is expected to be a drag on the second quarter export growth.
Meanwhile, imports rose at a more modest rate in the month, growing 0.2 percent. While on an inflation-adjusted basis, goods imports dropped. This is due in part to the prolonged fall in real petroleum imports, which are down nearly USD 5 billion from only seven months ago.
“Our current forecast looks for Q1 GDP to grow at an annualized pace of 1.8%. This report suggests upside risk to that estimate stemming from trade”, added Wells Fargo.
At 14:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was neutral at 23.4066 more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex
