The US trade gap contracted slightly in April from March's record level as imports declined, largely reflecting a drop in oil prices following the war in Iraq. The trade deficit fell 2pc to USD42bn in April from USD42.9bn in March, according to figures from the Commerce Department. Exports sank 2.2pc to USD81bn in April, the lowest level in a year, while imports eased by 2.1pc to USD123bn. The US imported 315 million barrels of oil in April - the second highest level on record - up from 301 million March. But the value of the oil imports fell to USD8.2bn from USD9bn, reflecting a slump in crude oil to USD26.04 per barrel from USD30.27.
For the first four months of the year, the US trade gap is more than 25pc larger than it was a year earlier. The deficit is expected to benefit over the coming months from the decline of the dollar against sterling and euro, as this will make US exports cheaper and increase the price for imported goods, which will in turn curb demand for foreign produced goods. //www.fxcentre.com