U.S. trade deficit widens in March, wholesale inventories remain stable

The advance estimates of U.S. trade data show that the goods trade deficit widened to USD 71.4 billion in March from USD 70.9 billion in the prior month. The March estimate was slightly below the widening expected by the consensus of USD 73 billion.

The slight widening in deficit was mainly because of imports, which rose 0.9 percent sequentially. This rise was partially countered by merchandise exports, which rose 1 percent sequentially in March. Even with the widening, goods deficit narrowed slightly over the initial three months of 2019, from YSD 79.5 billion in December to March’s USD 71.4 billion reading.

In the meantime, the latest estimates show that the book value of wholesale inventories remained stable in March after a downwardly revised increase of 0.1percent sequentially in February, and that the book value of retail inventories dropped 0.3 percent in March after February’s downwardly revised 0.2 percent rise.

“These latest data for trade and inventories are consistent with our view that various influences - including disruptions from the government shutdown - held back private domestic demand early in 2019, leading to weaker imports and stronger stockbuilding.  With incoming data pointing to a strong rebound in private demand rebounded in March, we expect inventory investment and trade to subtract from GDP growth in Q2”, said Barclays in a research report.

At 18:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was neutral at 1.07511 more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex