Release Explanation: This is a nation’s total exports of Goods, Services, and Transfers, deducted from its total imports of them. (Not to be confused with the Trade Balance that looks solely at imported and exported Goods). Current Account Balance calculations exclude transactions in Financial assets and liabilities. It is a comprehensive accounting review of a nation’s Global trade that includes the Trade Balance in its figures.
Trade Desk Thoughts: U.K. current account deficit reached £7.6 billion in the fourth quarter of 2008, down from a deficit of £8.2 billion in the second quarter, revised from £7.7 billion. The fourth quarter deficit was equivalent to -2.1% of GDP compared with -2.3 per cent in the previous quarter.
The lower current account deficit was a result of a higher surplus on trade in services, together with lower deficits on trade in goods and on current transfers, which outweighed a fall in the surplus on income.
Forex Technical Reaction: The pound fell 40 pips shortly after the release, extending the decline seen during the European session. Since the new trading day started, the pound has lost 150 pips and is heading towards the 50-day simple moving average.