Trade Desk Thoughts - U.K. Trade Balance

U.K. Trade Balance Actual -7.7B, Expected -7.5B, Previous -8.0B (revised from -7.7B)

Release Explanation: It measures the country’s exports minus its imports; the largest component of a country’s balance of payments. An increase or decrease in the Trade Balance will help determine the future economic outlook and growth numbers in a region. It can impact all aspects of an economy as it is the way that region balances its books.

Trade Desk Thoughts: In July, the deficit on trade in goods was 7.7B in U.K., bigger than analysts’ expectations of -7.5B. The previously released number, for the month of June, was revised to -8.0B from -7.7B. However, the total trade deficit, including goods and services shrunk in July to -4.6B, from -5.0B in June. Excluding oil and erratic items, the volume of exports was 2.5% higher in July from one month earlier, while the volume of imports was 0.5% higher. Export prices were 0.5% higher than in June and import prices were virtually unchanged.

Forex Technical Reaction: The pair did not move at the time of the release, but soon after, the pound declined 25 pips. Since the Asian session started, the pair has gained 50 pips. Earlier the pound had tested the 1.7680 area, a level that has acted as resistance for the last few days.

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