Foreigners dump u.s. Treasuries

Foreigners were net sellers of U.S. assets in May for the first time in 11 months as the prospect of persistently low U.S. interest rates spurred a hunt for higher returns elsewhere, Treasury data showed on Monday.

Concern about the U.S. fiscal deficit, which had started to creep into investors’ thinking and some politicians’ speeches by May, may have weakened foreign demand, too, analysts said.

Selling was heaviest in short-term assets such as bills and deposits, contributing to an overall net outflow of $67.5 billion. That was the first net outflow since June 2010, and it reversed a $66.6 billion inflow recorded in April 2011.

The U.S. dollar pared losses against the euro after the data while most Treasury debt prices cut gains.

Source: FinancialPost.com