Foreign Investors Boost Purchases of U.S. Securities
Dow Jones Newswires</br></br>Foreign investors increased purchases of U.S. securities in June for the first time in five months, evidence foreign demand is ample to sufficiently finance the U.S. current-account deficit.</br></br>Foreigners bought $71.8 billion in U.S. stocks and bonds in June, up from $65.2 billion in May, according to the Treasury Department. Analysts estimate $45 billion to $50 billion in foreign investment is needed each month to finance the U.S. current-account gap, the broadest gauge of the nation's global trade. It stood at a record $144.9 billion in the first quarter.</br></br>So far this year, foreign net purchases of U.S. securities are averaging around $75 billion a month, up from about $50 billion a month last year, analysts say. "Worries about the ability of the U.S. to finance its twin deficits -- the current-account deficit and budget deficit -- remain overblown," said Tony Crescenzi, chief bond-market strategist at Miller Tabak.</br></br>The June foreign-investment data exceeded financial markets' expectations that net purchases would be between $50 billion and $60 billion. "The dollar had a positive reaction simply because the number was better than most people expected," said Shahab Jalinoos, senior foreign-exchange strategist at ABN-AMRO.