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NEW YORK, Aug 15 (Reuters) - Net overall capital inflows into the United States dropped to $58.8 billion in June from May’s revised inflow of $107.3 billion, hurt by a plunge in net purchases of U.S. securities by private investors.
June’s net overall capital inflow barely covered the U.S. trade deficit for the month, which was $58.1 billion.
Net long-term capital inflows totaled $120.9 billion in June from a revised $126.0 billion in May.
“We’re still seeing healthy net long term inflows which is positive,” said Brian Dolan, FX research director at Forex.com in Bedminster, New Jersey. “The report is not a real dollar negative as we’re able to still cover the trade deficit.”
The dollar showed little reaction in foreign exchange markets after the U.S. Treasury flows report, while U.S. Treasuries held steady at higher price levels.
The report showed that nearly all of the net capital inflows in June, including investments in short-term securities, were from official sources such as foreign governments and central banks.
Net private sector inflows added just $700 million in June, slumping from $109 billion in May.
Data also showed that U.S. June net purchases of securities from official sources totaled $53.8 billion, the biggest since March 2004.
Foreigners snapped up a net $54.2 billion of U.S. Treasuries, from $21.6 billion in May.
Japan was still the largest holder of U.S. Treasuries with $612.3 billion during the month, down slightly from $615.2 billion previously. China, meanwhile, was a net seller of U.S. Treasuries for a third straight month. In June, China pared its U.S. Treasury holdings to $405.1 billion.
Net foreign inflows to U.S. equities fell to $28.8 billion in June, from $42.0 billion fthe previous month.
Net foreign purchases of U.S. corporate bonds slid to $25.9 billion during the month, from a record $72.6 billion in May.
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