Release Explanation: It measures the country’s exports minus its imports and is 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. The trade balance can influence 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 January, to £7.7 billion, more than market expected. The previous number was revised higher from a deficit of £7.4 billion to £7.2 billion.
The UK's deficit on trade in goods and services was £3.6 billion in January, compared with the deficit of £3.2 billion in December 2008. The surplus on trade in services was £4.2 billion, compared with a surplus of £4.0 billion in December
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 5.5%. Imports fell 1.5% in January, from one month earlier.
Forex Technical Reaction: The pound had a limited reaction to the news release. The pair traded between the neutral pivot point (1.3790) and TheLFB S1 (1.3670), during the overnight session, unable to move decisively in either direction