The figures, which showed the trade deficit widening to $57.2bn in October in spite of lower fuel prices, came as analysts sharply increased their estimate of the pace of economic contraction in the US this quarter. Macroeconomic Advisers, a consultancy, estimated that the US was on track for an annualised decline of 6.6 per cent.
Fresh data on unemployment claims also suggested that there was no respite in the rapidly deteriorating jobs market. Meanwhile, a Federal Reserve survey showed US household net worth decreased 4.7 per cent in the third quarter, the fourth consecutive quarterly decline. US mortgage borrowing fell at the fastest pace on record.
Just after midday in New York, the dollar was down 2.1 per cent on an index basis, while the euro was up 2.4 per cent against the US currency. Sterling also fell, hitting a fresh all-time low against the euro of 89p as traders appeared to shy away from the two big economies most obviously exposed to falling house prices and financial sector woes.