Posted on April 13, 2005 by Preston Danforth

Another great piece from Capital Spectator:

The U.S. balance of trade slipped to another all-time deficit in February–$61 billion vs. $59 billion in January, reports the U.S. Census Bureau. If you thought the news would take a hefty bite out of the dollar, you were mistaken. By the close of Wall Street trading today, the dollar gained ground against the euro and yen.

If that counters forex logic, think again, say the buck’s bulls. The catalyst for that corner of optimism stems from trade between U.S. and China, goes one school of thought. Although America’s trade deficit with China remains firmly negative, February’s level of red ink with the Middle Kingdom actually slipped in February from January, reports CBC.

In another instance of China’s sway over the markets, the International Energy Agency advised that demand growth for oil recently took a breather in the world’s most-populous nation. “Chinese demand growth slowed to 5.4% in the first two months of 2005, well below the 20.8% growth seen a year ago,” IEA reports. The news helped slash the price of a barrel of crude in New York today by almost $2.

Read more here