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| Trade Deficit in U.S. Narrowed as Oil Prices Declined |
| 7/15/2010 |
USAgNet
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The U.S. trade deficit probably narrowed in May to the lowest level in four months as lower oil prices restrained imports, economists said before a report this week.
The fallout from Europe’s debt crisis may limit trade flows in coming months and slow U.S. growth. The resulting increase in the value of the dollar makes American-made goods less competitive and could weigh on overseas sales at companies such as Deere & Co., the world's largest farm-equipment maker.
"Weakness in the euro is likely to put some pressure on the trade deficit," said Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia. "Export orders represent one of the bigger threats to the U.S. manufacturing sector right now. It seems the U.S. consumers are certainly not faltering in their demand for goods and services worldwide, but they're not growing at a significant pace either."
The Commerce Department's trade data is due at 8:30 a.m. in Washington. Economists' estimates ranged from deficits of $37 billion to $41.5 billion.
The figures follow a July 10 report that China's trade surplus widened in June to the highest this year as exports increased to a record. The gap jumped 140 percent from a year earlier, while exports surged 44 percent.
China on June 19 indicated it was ending the yuan's two- year peg to the U.S. dollar and has since allowed it to appreciate 0.8 percent. The U.S. Treasury Department said July 8 the Chinese currency remains undervalued. |
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