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6 May 2015
Stronger USD might continue to drag on US GDP growth – Nomura
FXStreet (Barcelona) - Economists at Nomura, review the US trade balance data release, and further add that the stronger dollar will likely hamper exports and support imports, which would drag on GDP growth.
Key Quotes
“The Census Bureau reported that the US trade deficit widened to -$51.4bn in March from a revised -$35.9bn in February (previously reported as -$35.4bn). The trade deficit was wider than expectations (Nomura: -$42.0bn, Consensus: -$41.7bn) and is the biggest deficit since October 2008.”
“The larger deficit was primarily owing to a 7.7% surge in imports, which had fallen by 4.2% and 3.6%, in February and January, respectively. Exports rose for the first time in five months, increasing by 0.9%, but remained depressed.”
“The rebound in imports in March was likely owing to the clearing of the backlog at West Coast ports, after the disruptions there ended in late February”
“We believe that exports were less affected by the West Coast disruptions as a smaller share of exports than imports flow through West Coast ports. Therefore, other factors such as the stronger US dollar and reduced foreign demand for US goods from slower global economic momentum are likely weighing on US exports.”
“Looking ahead, we expect the stronger dollar to continue to hamper exports and support imports. As such, net trade should continue to drag on GDP growth.”
Key Quotes
“The Census Bureau reported that the US trade deficit widened to -$51.4bn in March from a revised -$35.9bn in February (previously reported as -$35.4bn). The trade deficit was wider than expectations (Nomura: -$42.0bn, Consensus: -$41.7bn) and is the biggest deficit since October 2008.”
“The larger deficit was primarily owing to a 7.7% surge in imports, which had fallen by 4.2% and 3.6%, in February and January, respectively. Exports rose for the first time in five months, increasing by 0.9%, but remained depressed.”
“The rebound in imports in March was likely owing to the clearing of the backlog at West Coast ports, after the disruptions there ended in late February”
“We believe that exports were less affected by the West Coast disruptions as a smaller share of exports than imports flow through West Coast ports. Therefore, other factors such as the stronger US dollar and reduced foreign demand for US goods from slower global economic momentum are likely weighing on US exports.”
“Looking ahead, we expect the stronger dollar to continue to hamper exports and support imports. As such, net trade should continue to drag on GDP growth.”