07.02.201800:27 Forex Analysis & Reviews: The deficit of foreign trade in the US at record highs

Despite the good data for Germany, which came out in the morning, demand for the US dollar remained.

According to the report of the German Ministry of Economics, orders in the manufacturing sector of Germany in December last year grew due to strong demand from abroad. Thus, the total volume of production orders in December 2017 increased by 3.8% compared with the previous month, while economists expected that the growth in December will be 0.6%.

As I noted above, the leaders were export orders, which grew by 5.9%, while internal orders increased by only 0.7% compared to the previous month.

The US dollar has ignored the data on the next wave of growth of foreign trade deficit in the US, which peaked in nine years. This happened as a result of growth in imports due to strong consumer demand.

According to the report of the US Department of Commerce, the foreign trade deficit in December 2017 increased by 5.3% compared to the previous month and amounted to 53.12 billion US dollars. Economists had expected a deficit of $52.0 billion.

Import to the US grew by 2.5% to $ 256.5 billion. The increase in imports of goods during the holiday season had a negative impact on the indicator. There was also an increase in imports of cars and capital goods. Export grew by only 1.8% to $ 203.4 billion.

Speech by Fed official Bullard was generally ignored by the market.

Fed President St. Louis James Bullard said today that the relationship between the employment market and inflation has disrupted, and inflation expectations have risen. First of all, he was referring to the latest report of the US Department of Labor, which pointed to a serious increase in labor forces and an increase in wages, which would definitely spur inflation in early 2018, giving it a serious upward momentum along with economic growth.

Bullard also noted that the tax bill will promote investment growth, but the monetary policy is currently close to neutral and does not need to be adjusted.

It is worth paying attention to the fact that his opinion is at odds with the recent statements of his colleagues, in which it was clearly indicated that the Federal Reserve will raise interest rates this year.

The deficit of Canada's foreign trade in December grew due to the fact that imports prevailed over exports, which slowed significantly compared to the previous month.

According to the Bureau of Statistics of Canada, the foreign trade deficit in December 2018 increased by 3.19 billion Canadian dollars. Economists forecast a deficit of C$ 2.25 billion in December. Imports in December rose by 1.5%, to a record level of 49.70 billion Canadian dollars, while exports increased by 0.6%, to 46.51 billion Canadian dollars.