Skip to content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Sterling Makes Surprise Rally Following News of a Widened Trade Gap

Sterling Makes Surprise Rally Following News of a Widened Trade Gap

Benjamin Spier, Technical Strategist

THE TAKEAWAY: UK visible trade balance for February comes in worse than expected at -8.772 billions pounds -> exports of cars and heavy machinery drops -> GBD/USD surprises with a rally to weekly highs

The UK trade deficit rose to its highest level in three months in February due to a decline in export of cars and heavy machinery to China, Russia, and the United States. The visible trade balance for the month came in at -8.772 billion pounds, compared to analysts’ estimates of a 7.650 billion pound deficit. January’s balance was also revised lower to -7.883 billion pounds.

Exports for February fell 3.4% while imports were unchanged. The government is looking to boost exports to bolster the British economy to counterbalance unemployment and inflation. Prime Minister David Cameron is currently leading a trade and diplomatic delegation to Japan and Southeast Asia to this end.

Sterling_Makes_Surprise_Rally_Following_News_of_a_Widened_Trade_Gap_body_gbp.png, Sterling Makes Surprise Rally Following News of a Widened Trade Gap

Although a widening trade deficit usually means a decline in value for the country’s currency, GBP gained strength against USD and JPY on news of the higher than expected trade deficit. Following the data, GBDUSD hit a weekly high of 1.5950.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES