U.S. current account

The U.S. Current Account, the Dollar, and Real GDP Growth

September 19, 2017

The U.S. current account deficit, the broadest measure of net foreign demand, has been manageable in size and comparatively steady relative to GDP in the years since the Great Recession. The current account comprises trade in goods and services, net investment income, and transfer payments. As a percentage of nominal GDP, the deficit equaled 2.4% […] More

Dollar in Retreat

March 21, 2017

The dollar’s weaker again. The euro rose above $1.080 for the first time since February 2 and hit its best level since January 31. The greenback has fallen 0.9% against sterling, 0.7% relative to the euro, 0.4% vis-a-vis the kiwi, 0.3% versus the Swiss franc, Chinese yuan and Mexican peso, 0.2% against the loonie, and […] More

Across-the-Board Dollar Losses

March 17, 2016

Today’s market focus has been on central bank policies. The FOMC cited global developments and a downwardly revised perception of the longer term neutral interest rate level to justify only around two likely interest rate hikes in 2016 and a lower federal funds rate path throughout the forecast period. The Bank of Norway, Norges Bank, […] More

Fairly Wild Day after Fed Tightens

December 17, 2015

The Argentine peso dived about 30% to 13.95 per USD following the new Macri governments lifting of capital controls and withdrawal of intervention support. ¬†Officials reserve the right to intervene again in the future if deemed needed. The U.S. currency has advanced broadly and especially against commodity-sensitive currencies. ¬†The U.S. dollar rose 1.3%, 1.0% and […] More

Comments on U.S. Current Account, Consumer Prices, and Monetary Policy

June 18, 2015

Balance of payments data out today confirm a weakening that foreshadows the dollar’s correction downward since mid-March.  The $113.3 billion current account deficit in the first quarter was $10.2 billion wider than the prior quarter’s imbalance.  The deficit increased as well in each of the final two quarters of 2014, bringing the three-quarter cumulative deterioration […] More

Dollar Absorbing Twin Body Blows

September 19, 2013

It’s been a difficult Thursday-to-Thursday statement week for the dollar, which got sandbagged by yesterday’s Fed surprise not to begin reducing quantitative easing.  In the period, the U.S. currency suffered losses of 2.8% against the kiwi, 2.2% relative to the Swiss franc, 1.8% versus the Australian dollar, 1.7% against the euro and 1.5% at sterling’s […] More

How the U.S. Current Account Deficit was Funded Last Quarter

December 18, 2012

The U.S. current account deficit dropped $10.6 billion in the third quarter.  Although the decline was a bit less than analyst forecasts, it represented a 0.3 percentage point (ppt) reduction from the second quarter and a drop of 0.8 ppts from the first quarter of 2012.  All financing for the current account gap in 3Q […] More

Financing the U.S. Current Account Deficit — Part II

September 18, 2012

A second table below focuses on the eight components of direct investment and portfolio investment.  Changes in each component between 1Q12 and 2Q12 are noted in the right-most column, where a positively signed change indicates an increased net inflow, a reduced net outflow, or a swing from a net outflow to a net inflow.  The […] More

Financing the Second-Quarter U.S. Current Account Deficit – Part I

September 18, 2012

The current account deficit contracted 12% and to 3.0% of GDP from 3.5% of GDP in the first quarter.  Five-sixths of the deficit was covered by official capital inflows.  Direct and portfolio investment inflows, long-term capital inflows that represent the topmost quality of dollar support in fact generated a net outflow for a third straight […] More

Spain Gets More Bad News

June 14, 2012

The dollar has declined 0.8% against the kiwi, 0.5% versus the loonie, 0.4% relative to the Australian dollar, and 0.2% relative to the euro, Swissie, and sterling.  The yuan is steady. Share prices dropped 1.2% in Hong Kong and India, 1.8% in Indonesia, 1.7% in the Philippines, 0.8% in China, 0.5% in Australia and Singapore, […] More