Forex Flash: Quarterly balance of payment stats showed decline in US dollar term deficit - BTMU

FXstreet.com (Barcelona) - Derek Halpenny, European Head of Global Markets Research at the Bank of Tokyo Mitsubishi UFJ notes that yesterday, the release of the quarterly balance of payments statistics revealed a decline in the US current account deficit in dollar terms while the deficit in GDP terms was roughly unchanged at 2.8%.

He writes, “This is well down on the 2005 peak of 6.5%. Sure, as growth picks up relative to the rest of the world it may widen again but don’t forget the petroleum trade deficit is shrinking due to the domestic production boon which will cap the widening as growth outperforms elsewhere. The net FDI deficit also declined and revisions now mean the worst point of the deficit was in Q1 2012, and the deficit fell by USD 30bn from then to USD 177bn in Q4. CPI, TIC data and IP are the key reports being released today.”