U.S. Trade Balance Actual -26.0B, Expected -36.6B, Previous -36.2B
Release Explanation: A 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.
“This is a stand-alone valuation of the reliance, or not, of imported Goods compared to what is being sent abroad”, the LFB Trade Team said. “A currency will be greatly impacted by this report as the costs of buying Imports, or selling Exports, is reliant upon a currency’s valuation to a degree”. A country that Exports more than it Imports (China for example) will benefit from a weaker currency; its Exports are cheaper for foreigners to buy, and vice verse.
Trade Desk Thoughts: The Department of Commerce announced the total February exports of $126.8 billion and imports of $152 .7 billion resulted in a goods and services deficit of $26.0 billion, better than had been expected, down from $36.2 billion in January. February exports were $2.0 billion more than January exports of $124.7 billion. February imports were $8.2 billion less than January imports of $160.9 billion
Forex Technical Reaction: The dollar strengthened across the board after the release. The biggest gains came against the pound and Canadian dollar. The euro is trading back below the 1.3300 level but is off the lows of the day. Cable is back below the 1.4700 mark but holding above the 100 day simple moving average.