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US Dollar Dips After US Budget Deficit Tops $1 Trillion for a Fourth Year

US Dollar Dips After US Budget Deficit Tops $1 Trillion for a Fourth Year

Tzu-Wen Chen, Technical Strategist

THE TAKEAWAY: U.S. government posts first budget surplus in September in four months; overall deficit for fiscal year 2012 tops $1 billion for a fourth year > Ongoing debate over impending fiscal policy changes > USDCAD declines

The U.S. government posted its first monthly budget surplus in five months in September, while the overall federal budget deficit topped $1 trillion for a fourth straight year. According to the Treasury Department’s monthly budget statement released today, the government recorded a budget surplus of $75.0 billion in September compared with a $62.7 billion shortfall a year earlier. September’s monthly surplus fell in line with the median forecast of 20 economists surveyed by Bloomberg News.

Receipts outpaced outlays in September, with revenue rising 8.9 percent from the same month last year to $262 billion, while spending fell 38 percent to $187 billion over the same period.

Meanwhile, the overall budget shortfall for the year ended in September came in at $1.09 trillion. U.S. policymakers are continuing to deliberate on the impact of the impending fiscal policy changes of higher taxes and government spending cuts a month before the presidential election.

USDCAD 1-minute Chart: October 12, 2012

US_Dollar_Dips_After_US_Budget_Deficit_Tops_1_Trillion_for_a_Fourth_Year__body_Picture_2.png, US Dollar Dips After US Budget Deficit Tops $1 Trillion for a Fourth Year

Chart created using Market Scope – Prepared by Tzu-Wen Chen

The U.S. dollar dipped slightly against most major currencies in the minutes after the monthly budget statement was released. At the time this report was written, the greenback had declined further against the Canadian dollar, with the USDCAD pair trading at C$0.9792.

--- Written by Tzu-Wen Chen, DailyFX Research

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.