The US Treasury just released its December Trade Deficit numbers. The actual was a deficit of $40.18 Billion versus consensus of $36.8 Billion. Also, the November number was slightly revised lower to $36.39B from $36.40.
The higher than consensus number was caused by imports increasing by +4.4% versus 3.3% export growth. Overall, the 2009 Trade Balance Deficit registered at $380.7B versus a 2008 number of $695B. The overall drop for 2009 is attributed to much lower import prices for oil in 2009 versus 2008, along with the US's recession which curbed spending for exported goods.
The number has led to minor strength in the dollar, as Forex traders may be translating the healthy 3.3% increase in exports as a positive for the US economy. Also, the increase in imports could be attributed to US consumers and businesses increasing their purchases after months of cost cutting and saving.
After a slight drop directly after the news, the EURUSD has continued to fall and now stands at 1.3740 versus its pre news level of 1.3760. The GBPUSD which was at 1.5630 is now holding at 1.5610. With the dollar already rallying today, the Trade Balance numbers are only adding fuel to the greenback's fire.
Looking ahead, Forex traders are expected to send their attention on the opening of US equity markets along with Fed Chairman Ben Bernanke's morning testimony to the House Financial Services Committee.