U.S. dollar inches lower on higher U.S. trade deficit

  • World
  • Thursday, 08 Jun 2023

NEW YORK, June 7 (Xinhua) -- The U.S. dollar stayed nearly flat on Wednesday despite rising U.S. Treasury yields, as the U.S. trade deficit worsened materially in April.

The dollar index, which measures the greenback against six major peers, decreased 0.03 percent to 104.0906 in late trading.

The United States reported 74.6 billion U.S. dollars of trade deficit in April, much higher than 60.6 billion U.S. dollars in the previous month, according to data issued by the U.S. Bureau of Economic Analysis on Wednesday morning.

Still, the loss of U.S. dollar was significantly narrowed following the rise of U.S. Treasury bonds.

Statistics show that the yield of U.S. 10-year Treasury bonds increased by more than 10 basis points on Wednesday.

The Bank of Canada on Wednesday hiked its overnight rate to a 22-year high of 4.75 percent. The central bank had been on hold since January to assess the impact of previous hikes after raising borrowing costs eight times since March 2022 to a 15-year high of 4.50 percent, which is the fastest tightening cycle in the bank's history.

"Surprisingly strong consumer spending, a rebound in demand for services, a pick-up in housing activity and a tight labor market show excess demand is more persistent than anticipated," the central bank said in a statement.

Canada's economy grew more than expected in the first quarter, with a GDP growth rate of 3.1 percent.

"Consumption growth was surprisingly strong and broad-based, even after accounting for the boost from population gains," the Bank of Canada highlighted.

The U.S. dollar rose to 0.9095 Swiss francs from 0.9076 Swiss francs, and it fell to 1.3371 Canadian dollars from 1.3401 Canadian dollars in late New York trading.

The euro increased to 1.0703 dollars from 1.0694 dollars in the previous session, and the British pound rose to 1.2441 dollars from 1.2430 U.S. dollars in the previous session.

The U.S. dollar bought 140.0830 Japanese yen, higher than 139.6570 Japanese yen of the previous session. The U.S. dollar was down to 10.8915 Swedish Krona from 10.9108 Swedish Krona.

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