The U.S. dollar is approaching parity with its Canadian counterpart and is declining against the Japanese yen as the currency is sapped of its strength after the trade balance deficit has increased more than predicted, reducing the appeal of the greenback to the investors.
The import demand increased, causing the trade deficit to rise to $39.7 billion in February from $37 billion the month earlier. The deficit may yet be reduced with the aid of the foreign supplies as the global economic recovery boosts the emerging economies in Asia and the Latin America, providing the U.S. exporters with the wider range of markets to make overseas sales.
The experts say that we are not going to see the global rebalancing in the near future. The Canadian dollar’s race to parity with the greenback was slowed by the falling prices for the crude oil, the main nation’s export.
USD/CAD traded at about 1.0013 as of 20:24 GMT today after it opened at 1.0024 and dropped as low as 1.0005. USD/JPY traded near 93.19 down from the opening rate of 92.23. EUR/USD traded at 1.3601.
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