"The combination of financial healing, greater balance in the housing market, less fiscal restraint, and, of course, continued monetary policy accommodation bodes well for US economic growth in coming quarters"
- Ben Bernanke, Fed Chairman
The U.S. Senate has confirmed Janet Yellen as the next Chairman of American central bank, with 56 senators voting in favour of her appointment. While some analysts are already warning her about the difficult road ahead once Ben Bernanke steps down after eight years ruling the Fed, the domestic economy may decrease pressure on the first woman, who will lead the Federal Reserve.
On Tuesday the Commerce Department unveiled the November trade balance data, saying the gap between exports and imports narrowed to the lowest level since October 2009. The gap shrank 12.9% to $34.3 billion, from a revised figure of $39.3 billion a month earlier, surprising markets on the upside. In the meantime, the current account gap narrowed to $94.8 billion, hitting the smallest reading since the third quarter of 2009 and posting a significant improvement from the previous quarter's shortfall of $96.6 billion. This is equal to 2.2% of the U.S. GDP– the smallest share since the beginning of 1998. Exports soared 0.9% to $194.9 billion, climbing to a record level, while imports sank 1.4%. The world's largest economy expanded by 4.1% in the third quarter, while estimates for the final quarter have been revised up on the back of stronger consumer spending and manufacturing. All these figures are pointing at strengthening of the U.S. economy, hence, there is a ground for more hawkish comments from the Fed, and, therefore, the buck can appreciate in the nearest future.
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