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: The U.K. deficit widened again in November to a record £8.3 billion, more than market expected. The previous number was revised lower, from a deficit of £7.8 billion to £7.6 billion. The surplus on trade in services was £3.9 billion, compared with a surplus of £3.8 in October. Exports fell by £1.2 billion, largely reflecting a fall in exports to non European Union (EU) countries including the United States, and imports fell by £0.5 billion.
The trade balance release shows that consumption is slowing in the U.K, and at the same time, exporters have a hard time opening new trading routes, despite the much weaker pound. Excluding volatile items, exports fell by 7%, which shows the magnitude of the downturn. The weaker export market was taken into account at the latest BOE meeting.
Forex Technical Reaction: The pound fell nearly 200 pips during the overnight session, dropping for the third consecutive day. After the release, the pair dropped to TheLFB S2