GBP/USD Shrugs Off Better Than Expected Trade Balance
- Visible Trade Balance came at -£9351M, above the -£10600M expected
- Total Trade Balance printed -£1353M, above expectations
- Pound little changed versus the US Dollar
The British Pound was little changed versus the US Dollar, at the time this report was written, after today’s UK trade balance data printed better than forecasted numbers. Visible trade balance, which does not record intangibles like services (only reporting on physical goods) came at -£9351M in September, above the -£10600M expected by economists, with a prior revised reading of -£10786M. Total trade balance printed -£1353M versus -£3000M expected, with a revised -£2905M from the August report. The non EU trade balance, which is a gauge of Britain's trade with countries outside of Europe, came at -£2076M versus the -£3100M expected, with a revised prior reading of -£3842M.
Looking into the report, the narrowing deficit of trade in goods and services was attributed to trade in goods, where deficit decreased to £9.4 billion from £10.8 billion in August. Exports of goods increased by £0.6 billion to £24.0 billion, due to an increase in chemicals of £0.6 billion. Imports of goods decreased by £0.9 billion to £33.3 billion, attributed to a decrease in unspecified goods of £1.0 billion. While the data was positive for this month, balance for the quarter is still below Q2, as the three months imports came at 7.8% versus the prior 7.1%, while exports came in at 1.7% versus the 5.3% prior.
The Pound has been trading lower since the beginning of the day from the high of around 1.5219, a day after “Super Thursday”, when the BoE’s Monetary Policy Committee reduced its inflation forecasts for the end of 2015, as well as in 2016 to 2017, which saw a significant decline in the British Pound, as was noted by DailyFX Currency Strategist Christopher Vecchio. BoE’s governor Carney said that rates could stay lower for longer if downside risks to the economy materialize.
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