Dollar rises against yen as US trade gap narrows to $64.3 billion in September

Mumbai: The dollar reached a two-week high of ¥118.24 following reports of a fall in US trade deficit in September. US trade gap narrowed more than economists forecast. The US trade deficit recorded a fall of 6.8 per cent, the sharpest in almost two years, in September as the value of crude oil imports fell amidst a rise in American exports to emerging economies.

The deficit, which was smaller than forecast, narrowed to $64.3 billion from an all-time high of $69 billion in August, the commerce department said in Washington.

The fall in trade gap comes amidst a rise in US trade bill with China.

The US currency gained to ¥118.24 in morning trade in New York from ¥117.84 the previous day. The dollar traded at $1.2809 per euro from $1.2757.

Cheaper fuel costs also led to a decline in import prices last month that was twice as much as economists had forecast, a labor department report showed. Import prices dropped two percent, matching the previous month's decline as the biggest since April 2003. Excluding petroleum, import prices fell 0.6 per cent, the most since February.

Meanwhile, US consumer confidence held near the highest in 15 months in November, a separate industry report showed. The University of Michigan's index of consumer sentiment was 92.3, compared with 93.6 last month.

Lower costs for imports give US companies reason to hold the line on prices, pointing to lower inflation that will allow Federal Reserve policy makers to keep interest rates unchanged through early 2007.