Foreigners' net purchases of US assets were $75.7 billion in the month of December, down from $87.5 billion of net inflows in November, US Treasury Department data showed on Tuesday.
"I think expectations were for somewhat lower numbers, so (the report) is a temporary plus for the dollar when we get these unexpectedly higher numbers, even though they were down a bit from the month before," said Larry Brickman, currency strategist with Banc of America Securities in New York.
Last week, some currency analysts had said that a net inflow of more than $60 billion would likely buoy the US currency.
The capital inflows take on increasing importance given the pressing need for the United States to attract hefty capital inflows to finance its wide current account deficit, and the number looms large on traders' radar screens.
Currency analysts and traders closely watch the pattern of net inflows and outflows for US assets these official data show, even though the Treasury's monthly data is released with a month and a half time lag.
During recent months, these data have been a key catalyst for the dollar's near term performance.
Foreigners' net purchases of US Treasury bonds and notes were $29.8 billion in the month of December, down from $33.4 billion of net purchases in November, according to monthly international capital flows data released by the Treasury Department.
Foreigners' made net purchases of US equities of $13.3 billion in December, up from $8.8 billion of net purchases in November, the data showed.
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