The US Trade Balance
Thursday, December 11, 2008, 8:30 EST USA
Forex news Trade Alert
It is expected to Come out -$56.0 B. If it comes -$60.0 B or higher, EUR/USD should SPIKE up by 45 Pips.
If it Comes at -52.0 B or lower, EUR/USD should SPIKE dowon by 50 Pips.
The US Trade Balance refers to the difference between exports of goods and services out of the US, and imports to America. The trade balance is one of the biggest components of the USs Balance of Payment, which gives valuable insight and heavy pressure on the value of the dollar.
A positive Trade Balance (surplus) indicates that exports are greater than imports. When imports exceed exports, the US experiences a trade deficit. Because foreign goods are usually purchased using foreign currency, trade deficits usually reflect dollars leaking out of the country. Such currency outflows may lead to a natural depreciation of a dollar, unless countered by comparable capital inflows (US Net Foreign Security Purchases, or TICs data reports on such capital flows). At a bare minimum, deficits fundamentally weigh down the value of the currency.
There are a number of factors that work to diminish the market impact of US Trade Balance. The report is not very timely, coming some time after the reporting period. Developments in many of the figures components are also typically well anticipated. Lastly, since the report reflects data for a specific reporting month, any significant changes in the Trade Balance should plausibly have already been felt during that month and not during the release of data. However, because of the overall significance of Trade Balance data in forecasting trends in the Forex Market, the release has historically been one of the more important reports out of the US .
The headline figure for trade balance is expressed in billion of dollars.
Blogsphere: TechnoratiFeedsterBloglines
Bookmark: Del.icio.usSpurlFurlSimpyBlinkDigg
RSS feed for comments on this post
Leave a Reply
- February 2010 (4)
- January 2010 (4)
- December 2009 (1)
- November 2009 (3)
- October 2009 (4)
- September 2009 (3)
- August 2009 (1)
- July 2009 (2)
- June 2009 (6)
- May 2009 (1)
- April 2009 (6)
- March 2009 (3)
- February 2009 (5)
- January 2009 (6)
- December 2008 (5)
- November 2008 (4)
- October 2008 (6)
- September 2008 (8)
- August 2008 (8)
- July 2008 (16)
- June 2008 (13)
- May 2008 (12)
- April 2008 (15)
- March 2008 (2)
- December 2007 (3)
- November 2007 (56)
