US Dollar Trades Weakly Over Disappointing Economic Data Releases
Ahead of the NFP report release today, the US dollar is trading bearish for the fifth consecutive day over recent weak economic data releases. At the time of writing, the US dollar index DXY is trading at around 97.37.
According to data released by the Commerce Department on Thursday, the US trade deficit fell for the fourth consecutive month in November, touching the lowest levels seen since May 2018. Amid escalating trade tensions, US’s trade deficit narrowed 7.6% to $47.2 billion during November over a reduction in both imports as well as exports.
The data came in weaker than expected, as economists were forecasting a decline in the trade deficit till $48.7 billion. The goods trade deficit between the US and China declined by 1.1% to $31.3 billion even though imports remained steady while exports rose 3.4% higher during November. Meanwhile, the trade deficit with Europe surged 20% higher to $16.4 billion as imports rose to record highs.
The disappointing economic data releases showcases weakness in the US economy and is weighing on the US dollar. While the Fed had, in its last meeting, signaled a pause in rate cuts, weak data increases the possibility of more rate cuts to offset the weakness in the economy.
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