U.S. Dollar Faces Bearish Pressure as Trade Deficit Hits $78.2B in November

On the export side, industrial supplies and materials contributed significantly, with a $4.3 billion rise driven by petroleum products and crude oil. Automotive exports grew by $1.9 billion, reflecting higher shipments of passenger cars and trucks. Capital goods also showed strength, rising $1.8 billion, led by aircraft engines and machinery.

However, imports surged at a faster pace. Goods imports increased by $11.6 billion, with notable contributions from industrial supplies ($3.7 billion), capital goods ($3.5 billion), and food products ($1.4 billion). Higher semiconductor imports, along with crude oil and nonmonetary gold, signaled strong domestic demand.

Year-to-Date Trade Trends For the year to date, the trade deficit widened by $93.9 billion, up 13% from the same period in 2023. Exports rose 4% to $111.5 billion, while imports advanced 5.8% by $205.3 billion. The three-month moving average of the trade deficit also increased by $2.5 billion, reflecting persistent imbalances.

Key Country-Specific Trade Movements The U.S. maintained surpluses with countries like the Netherlands ($5.4 billion) and South and Central America ($3.6 billion). However, deficits with China ($25.4 billion), the European Union ($20.5 billion), and Mexico ($15.4 billion) continued to weigh on overall balances. A notable increase in the deficit with France by $2.2 billion to $2.3 billion highlights rising imports of French goods.

The U.S. trade relationship with Japan showed improvement, with the deficit narrowing by $1.2 billion to $5.3 billion, driven by increased exports and reduced imports.

Market Outlook – Bearish for USD