The US Dollar has strengthened against the Euro and British Pound after data showed that the USA’s trade deficit widened less than expected in April as exports hit a four-month high.
The US Commerce department said on Tuesday that the country’s trade gap increased by 8.5% to $40.3 billion. The shortfall recorded in March was revised to $37.1 billion from the previous reading of $38.8 billion. Economists had been expecting the trade deficit to rise to $41 billion in April.
The widening trade deficit has added to concerns that the recovery in the world’s largest economy is slowing down and combined with Mondays weaker than expected manufacturing ISM data speculation has risen that the Fed Reserve may choose to refrain from cutting its monetary easing programme.
The widening of the trade gap could also cause economists to lower their estimates for the USA’s second quarter Gross Domestic Product. The American economy has hit a speed bump, with higher taxes and government spending cuts crimping consumer spending and weighing on manufacturing activity. Growth estimates for this quarter currently range between a 1.2% and 2% annual pace.
Economists are hoping that strong export growth out of the US will help lift the economy into a sustained path of recovery and growth. Unfortunately signs of a slowdown have appeared with declines in global demand in China and the debt ravaged Euro zone.
US exports to the Europe declined by 7.9% in April, exports to the UK fell to their lowest level since May 2009.
US Dollar (USD) Current Exchange Rates
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6537
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7648
The US Dollar/Australian Dollar Exchange Rate is currently in the region of: 1.0337
The US Dollar/Japanese Yen Exchange Rate is currently in the region of: 100.3114
The US Dollar/Canadian Dollar Exchange Rate is currently in the region of: 1.0323
(Correct as of 14:30pm GMT)
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