Smaller Trade Gap Boosts Dollar

A dollar sell-off in Asian trading was reversed Wednesday by news of a smaller-than-expected U.S trade deficit, leaving the greenback higher against leading currencies.

The dollar’s rise prompted investors to sell German marks and buy European currencies that had gained this week against the German currency.

“The market was short on dollars and caught very much off guard by the improvement in the U.S. trade deficit,” said Charles Spence, director of treasury sales at Standard Chartered Bank.

Exchange Currency in Dollars Dollar in foreign currency Canada .7471 1.3385 France .2005 4.9870 Germany .7033 1.4218 Great Britain 1.5680 .6378 Italy .000625 1601.00 Japan .009926 100.75 Mexico .149477 6.6900