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.

Free Trading Guides
EUR/USD
Mixed
GBP/USD
Bullish
USD/JPY
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Mixed
Oil - US Crude
Mixed
Bitcoin
Bearish
More View more
Real Time News
  • Geopolitical developments send #oil prices soaring or falling. Get your market update from @MartinSEssex here:https://t.co/XVXLyG8vjq #OOTT https://t.co/RMk5Eb5fLU
  • Negative yielding government bonds – What are they telling us? Find out from @nickcawley1 here: https://t.co/F6JuhmrvPT https://t.co/KdpSjQSJ8F
  • #Euro area stocks may be preparing to break the four-month uptrend built around hopes for a US-China trade deal and an orderly #Brexit outcome. Get your market update from @IlyaSpivak here: https://t.co/ujlCJiXLvh https://t.co/INdFtsrTTF
  • What is the top market moving theme for the coming week? I disagree with the majority. '$EURUSD, $GBPUSD and $AUDUSD Top Volatility Candidates With #Fed, #Election, #TradeWar' https://www.dailyfx.com/forex/video/daily_news_report/2019/12/07/EURUSD-GBPUSD-and-AUDUSD-Top-Volatility-Candidates-On-Fed-Election-Trade-War.html?CHID=9&QPID=917719 https://t.co/Q1dbZVN5Us
  • The Australian Dollar was focused on its home country in the past week, but that is likely to change sharply in the days ahead with major global risk events coming up. Get your $AUDUSD market update from @DavidCottleFX here: https://t.co/yZz3hCyVMx https://t.co/1xw1JHwd7l
  • The #Euro broke chart resistance, threatening to challenge the bounds of its longer -term downtrend against the $USD. Bulls may find it premature to celebrate however. Get your market update from @IlyaSpivak here: https://t.co/VfR13llYbW https://t.co/LiWTvIygxc
  • The $USD appears to be stalling against the Singapore Dollar, Malaysian Ringgit, Indonesian Rupiah and Philippine Peso, but technical analysis may still favor USD strength. Get your market update from @ddubrovskyFX here:https://t.co/AZp98MoXKo https://t.co/jgZMUFVGJB
  • The Indian Rupee soared after the Reserve Bank of India surprised with a rate hold. $USDINR may climb as support reinstates the uptrend ahead of Indian CPI and global trade tensions. Get your market update from @ddubrovskyFX here:https://t.co/QEOabsDfMn https://t.co/rqn8Zjrvkv
  • #Gold closed lower after paring early-week gains post-NFP on Friday. But will price finally break support? These are levels that matter on the $XAUUSD weekly chart. Get your $gld technical analysis from @MBForex here: https://t.co/RILBGhLAQZ https://t.co/q5znMUlEQA
  • German Bund Yields Update: 2-Year: -0.639% 3-Year: -0.651% 5-Year: -0.548% 7-Year: -0.480% 10-Year: -0.290% 30-Year: 0.228%
US Dollar Unfazed by US Trade Balance Deterioration in January

US Dollar Unfazed by US Trade Balance Deterioration in January

2017-03-07 15:35:00
Dylan Jusino,
Share:

Talking Points:

- US Trade Balance for January came in matching forecasts at -$48.5 billion.

- The market is looking towards the upcoming US labor market reports at the end of the week.

- See the DailyFX Economic Calendar for upcoming economic data and for a schedule of live coverage see the DailyFX Webinar Calendar.

As traders look towards the upcoming US Nonfarm Payrolls report on Friday, trade data from January has offered little good news. The US Trade Balance came in as forecasted at -$48.5 billion, nearly a 10% increase from the -$44.3 billion deficit seen in December 2016. Exports in January ticked up by $1.05 billion to $127.95 billion from $126.9 billion in December, while imports also rose in January by $5.08 billion to $197.64 billion from $192.56 the month prior.

The trade balance, net exports, is a component of gross domestic product and is one of the biggest components of the US’s balance of payment. This economic indicator gives insight on the value of the dollar. When exports are greater than imports US experiences a trade surplus. Conversely, when imports exceed exports the US experiences a trade deficit. A strengthening US Dollar encourages American consumers to import more from abroad, while also discouraging foreigners from purchasing American-made goods as they become more expensive, relatively speaking.

Markets largely ignored the release of the Trade Balance considering there was no surprise in the print figure. More importantly, the US Nonfarm Payrolls report will be released this Friday, which is the last piece of data the Fed will assess prior to the FOMC meeting next week. Fed Chair Janet Yellen stated last weekgiven how close we are to meeting our statutory goals, and in the absence of new developments that might materially worsen the economic outlook, the process of scaling back accommodation likely will not be as slow as it was in 2015 and 2016.”

In sum, so long as we do not see a big negative surprise – a print below +100K, for example - we can expect the Fed to hike rates next week. As for the US Trade Balance, if the Fed continues on the path to normalizing monetary policy we can expect exports to decrease amid a stronger and more expensive dollar, this will in effect serve to exacerbate the trade deficit.

Senior Currency Strategist Christopher Vecchio will be covering the US labor data live on Friday, March 10 at 8:15 EST/13:15 GMTyou can register here.

Here’s a summary of today’s US economic figures:

- USD Trade Balance (JAN): -$48.5B as expected, from -$44.3B.

- USD Exports of Goods & Services (JAN): +0.6%.

- USD Imports of Goods & Services (JAN): +2.3%.

Chart 1: EUR/USD 1-minute Chart (March 7, 2017 Intraday)

US Dollar Unfazed by US Trade Balance Deterioration in January

Immediately following the data, the US Dollar was flat against the Euro, though the pair continued along with its daily trend of modest losses soon after. EUR/USD dropped from 1.0576 ahead of the release to as low as 1.0575 thereafter. At the time this report was written, the pair was trading at 1.0563.

Read more: GBP/JPY, GBP/USD in Vulnerable Positions; EUR/GBP Looks Higher

--- Written by Dylan Jusino, DailyFX Research

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

DISCLOSURES

News & Analysis at your fingertips.