The US trade deficit narrowed in December as oil import prices had the biggest decline in nearly 14 years, and first-time claims for jobless benefits fell to the lowest level in more than four years.
However, the annual trade gap still widened more than 24 per cent in 2004 to a record $617.7 billion, the Commerce Department said today.
The December trade gap totalled $56.4 billion, only slightly below the average estimate of Wall Street analysts surveyed before the report.
The trade gap partly reflects stronger US economic growth than in the rest of world. A separate report today provided more evidence of that as the number of Americans filing initial claims for jobless benefits fell unexpectedly last week to 303,000.
"Across the board, it's pretty good data for the US. Not only the trade deficit coming down more than expected, but initial jobless claims were the lowest since late 2000. It's hard to find what the market would not like about this for the dollar," said Mr Robert Sinche of Global Foreign Exchange Strategy, Bank of America.
The dollar, which has been under pressure because of the huge trade deficit, rose against both the euro and the yen in early trading after the trade report, while US Treasury debt prices dipped on the fall in jobless claims.