Dollar in the <snip>..trade deficit soars...adda boy bush..you're the best

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Dollar Slips As U.S. Trade Deficit Soars

Wed Jan 12, 3:48 PM ET Business - AP

BERLIN - The dollar dropped sharply against major currencies Wednesday after figures showed that the United States' trade deficit soared to an all-time high in November.

The dollar, which made strong gains last week against the euro, has slid back this week. It was edging up Wednesday before the deficit data emerged, but then it dropped. In late New York trading, the euro was quoted at $1.3271, up from an intraday low of 1.3084 and above late Tuesday's rate of $1.3123.


The U.S. currency also lost heavily against the British pound, which jumped to $1.8914 in late New York trading from $1.8776 late Tuesday. The dollar bought 102.35 yen, down from 103.25; 1.1658 Swiss francs, down from 1.1813; and 1.1995 Canadian dollars, down from 1.2170.


Worries over the wide U.S. trade and budget deficits have been the key factor in the dollar's decline in recent months against the euro, which reached a record high of $1.3667 on Dec. 30.


The Commerce Department (news - web sites) said the November deficit was up 7.7 percent from an imbalance of $56 billion in October, which had been the previous monthly record. The new record — $60.3 billion — surprised private economists, who had forecast a slight narrowing in the trade gap.


Last week's mini-rally came as the dollar garnered support from optimism about economic growth in the United States.


While Washington insists it has a "strong dollar" policy, many analysts believe the U.S. government is content to see the dollar fall because it makes U.S. exports cheaper.


Comments reaffirming the "strong dollar" policy this week by U.S Treasury Secretary John Snow were seen by markets as indicating a hands-off approach and failed to strengthen the currency.


On Wednesday, Snow played down the record trade deficit, telling reporters in New York that "the trade gap reflects the fact that Americans are becoming more prosperous."