U.S. Trade Balance (June)

Daily Forex Fundamentals | Written by TheLFB-Forex.com | Aug 12 08 13:01 GMT |

Actual -56.8B, Expected -61.8B, Previous -59.8B

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 standalone valuation of the reliance, or not, of imported Goods compared to what is being sent abroad. 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 versa.

Trade Desk Thoughts: An increase was expected because oil prices had risen strongly in the month. The report will add to Q2 GDP, but the decrease in imports may also point to a weakening of demand towards the end of the quarter.

Forex Technical Reaction: After making a slight bounce to the upside, currency prices are virtually unchanged after the report. Of more importance for today will be the Russian/Georgian conflict. Russia has announced that it's halted military operations in Georgia now that it's taken over the area in dispute. BP is reporting that one of its three pipelines has been temporarily shut down due to damage.

Written by TheLFB Trade Team, © 2007-2008 LFB Services, LLC. All rights reserved. http://www.TheLFB-Forex.com

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