US trade deficit hits record high
London, November 11:
Record oil prices as a result of Hurricane Katrina and a strike at plane-maker Boeing sent America’s trade deficit surging to an unprecedented $66.1 billion in September, the US commerce department announced.
Shattering the previous record shortfall of $60.4 billion in February, the scale of the deterioration shocked a Wall Street that had been bracing itself for bad news following the devastation to Louisiana and Mississippi at the end of August.
``We knew that there were going to be some hurricane-related distortions in the September data. But this really exceeded our worst fears. This was a turn for the worst,” said Michael Woolfolk, senior currency strategist for Bank of New York.
The dollar, strong in recent weeks against the euro, the Japanese yen and the pound, fell briefly after the trade figures were announced but then quickly shrugged off news that the US trade gap had widened by more than 11 per cent in the month.
Economists said strengthening of the US dollar was making the trade picture worse by pushing up the cost of exports. They added that much of the deterioration in September had been caused by special factors - the rise in the oil price and the closure of US oil facilities.