—WASHINGTON The U.S. fourth quarter current account data, the broadest measure of international transactions, showed the expected improvement, with foreign sources funding the gap primarily via purchases of Treasury bills.
The narrow trade balance data showed about a $2.5 billion quarterly improvement in Q4, so it was not surprising that the Q4 current account on an annualized basis improved to a $81.1 billion deficit (1.9% of GDP) from a $96.4 billion deficit in Q3 (2.3%). The U.S. dollar depreciated 1% in Q4 against seven major currencies.
Also, income receipts on U.S.-owned assets abroad jumped due to better direct investment, and an increase in fines reduced unilateral transfers (amounts that went abroad).
The current account was funded via $92.7 billion in private purchases of Treasuries. Buying in government bonds shifted to T-bills, while there was net selling in coupons. Foreign private accounts also bought $51 billion of corporate bonds.
Foreign accounts sold $19.1 billion in agencies and $61.3 billion stocks. This suggests there was a pronounced shift away from risk. Financial derivatives had $2.7 billion in selling, after a $6.6 billion deficit in Q3.
The statistical discrepancy was a huge $92.6 billion deficit in Q4.
For all 2013 the current account was a $379.3 billion deficit or 2.3% of GDP, after $440.4 billion deficit in 2012 (2.7%), showing improvement on better trade.
Market News International is a real-time global news service for fixed-income and foreign exchange market professionals. See
