Dollar shrugs off deficit
This morning the dollar was at 1.1699 against the euro and 1.7407 to the pound.
While news that the trade gap had reached a record level unsettled the dollar, it was not enough to counteract the growing chorus of voices from the Federal Reserve targeting sustained interest rate rises.
The US Commerce Department said the trade deficit stood at $66.1 billion in September, with rising energy costs in the wake of Hurricane Katrina playing their part.
Imports rose by 2.4 per cent for the month, while exports fell by 2.6 per cent.
The Bank of New York's Michael Woolfolk told AFX that the fact that the deficit had not hurt the dollar was indicative of its strength.
"The dollar's ability to shrug off the record trade deficit reflects the degree to which the market is bullish right now on the greenback," he said.