While the larger trade gap in the U.S. could cause a downward revision to Q4 GDP, the details of the report were not as nearly as grim as the headline number. Exports increased 1% while imports rose 3.8% to a record high in November. The strong demand for foreign goods reflects inventory stockpiling by U.S. retailers stocking up for the holiday shopping season. With the effects of Hurricane Sandy fading, demand for autos also rebounded. If not for the decline in oil prices, imports would have probably been even stronger and for the rest of the world, rising U.S demand is positive for growth.
Up North, Canada reported its fourth largest trade deficit ever. While imports also increased 2.7%, exports dropped 0.9%. As a country that is dependent on foreign demand, the decline in exports is bad news for Canada, especially since it is caused by weaker demand for energy and metal products. Exports to the European Union in particular dropped 19.4%. There have been a lot of inconsistencies in Canadian data recently with strong job growth in November and December failing to coincide with stronger economic activity. Yet with the IVEY PMI index rebounding in December after pulling back sharply in November, trade activity should improve next month.
Recommended Content
Editors’ Picks
USD/JPY pops and drops on BoJ's expected hold
USD/JPY reverses a knee-jerk spike to 142.80 and returns to the red below 142.50 after the Bank of Japan announced on Friday that it maintained the short-term rate target in the range of 0.15%-0.25%, as widely expected. Governor Ueda's press conference is next in focus.
AUD/USD bears attack 0.6800 amid PBOC's status-quo, cautious mood
AUD/USD attacks 0.6800 in Friday's Asian trading, extending its gradual retreat after the PBOC unexpectedly left mortgage lending rates unchanged in September. A cautious market mood also adds to the weight on the Aussie. Fedspeak eyed.
Gold consolidates near record high, bullish potential seems intact
Gold price regained positive traction on Thursday and rallied back closer to the all-time peak touched the previous day in reaction to the Federal Reserve's decision to start the policy easing cycle with an oversized rate cut.
Ethereum rallies over 6% following decision to split Pectra upgrade into two phases
In its Consensus Layer Call on Thursday, Ethereum developers decided to split the upcoming Pectra upgrade into two batches. The decision follows concerns about potential risks in shipping the previously approved series of Ethereum improvement proposals.
Bank of Japan set to keep rates on hold after July’s hike shocked markets
The Bank of Japan is expected to keep its short-term interest rate target between 0.15% and 0.25% on Friday, following the conclusion of its two-day monetary policy review. The decision is set to be announced during the early Asian session.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.