Investors and commentators tend to oscillate between extremes. Lately it seems like most traders feel like the UK is in full economic collapse. The trade report today is being pounded as more evidence for a terrible future on the GBP. There was a great summary of the announcement on Bloomberg today.

The article makes a good point; the deficit widened because of demand. The data lags a full month but good demand is not particularly indicative of an economy circling the drain. In fact, if you look at the numbers, although the deficit widened both exports and imports increased. If they had both shrunk or if exports had declined I would be a little more concerned. For my own analysis it makes be wonder if we are due for a bounce on the GBP/USD in the 1.95 range.