Page last updated at 13:19 GMT, Friday, 9 May 2008 14:19 UK

Weak dollar narrows US trade gap

An oil pipeline
Surging oil prices may make it hard for the US trade gap to continue to shrink.

The US trade deficit shrank by more than expected in March as the weak dollar led to a surge in exports, official figures show.

The slowing economy also meant that Americans bought fewer products made abroad, including cars and furniture, the Commerce Department said.

The trade gap narrowed to $58.2bn (29.9bn) from February's revised $61.7bn, well below the expected $61bn.

A weaker dollar makes US goods cheaper for customers overseas.

China exports rise

The deficit had been expected to continue to fall this year as the US downturn reduces spending on imports.

However, the surging oil price may mean the gap cannot narrow much further, despite the weak dollar.

The politically-sensitive trade deficit with China narrowed to $16.1bn, the lowest level for more than two years.

Meanwhile, exports to China hit their second highest level.

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