yuan breaks key barrier againts dollar

Record exports push trade gap lower in March
Deficit narrows to $62 billion, lowest since August
E-mail | Print | | Disable live quotes By Greg Robb, Market Watch
Last Update: 9:50 AM ET May 12, 2006


WASHINGTON (Market Watch) -- Record exports to some of the largest U.S. trading partners pushed the trade deficit lower in March, a government report showed Friday.
The nation's trade deficit narrowed by 5.6% to $62 billion, the Commerce Department said. Read full government report.
It is the lowest deficit since August, just before hurricane damage to refineries along the Gulf Coast caused a sharp updraft in the deficit because of the need for imported energy products.
This is the first time the deficit has declined for two straight months since October and November 2003. The improved trade balance was even more remarkable because exports of civilian aircraft, typically a source of export strength, declined in March.
The U.S. exported a record amount of goods to Canada, Mexico, the European Union, China and the South/Central America region in March.
The narrowing trade gap for March caught economists by surprise. Economists surveyed by Market Watch had expected the deficit to widen to $66.9 billion. See Economic Calendar.
Financial markets cheered the lower deficit, but only for a brief period, before rising bond yields turned sentiment sour. See full story.
Economists said the narrowing of the deficit was welcome, but were not ready to declare a turning point in the deficit.