WASHINGTON, (Reuters):
THE UNITED States current account deficit widened more than expected in the fourth quarter to a record US$187.9 billion, and the current account deficit grew 25 per cent for the year as a whole, a government report showed yesterday.
Separate reports showed housing starts climbing to a 21-year high in February and capacity utilisation at U.S. factories, mines and utilities increasing more than expected.
RENEWED WORRIES
The quarterly current account gap overshot Wall Street expectations for a US$181.9 billion deficit. For 2004, the current account deficit surged to a new high of US$665.9 billion from the 2003 gap of US$530.7 billion, the Commerce Department said. The yawning trade gap renewed worries that the massive borrowing necessary to finance the U.S. deficit might not be
sustainable.
"The news that the current account deficit hit a record high of $187.9 billion (6.3 per cent of GDP) in the fourth quarter is
likely to put the dollar under
further pressure," said Paul Ashworth, senior international economist for CapitalEconomics.
The euro initially rose against the dollar following the data, reaching $1.3401 from about $1.3380 shortly before the report. The dollar also fell against the yen.
