Trade Balance

Trade Balance is an important indicator and it is released by the Office of National Statistics in the UK.

This indicator shows the difference in values of imported and exported goods during the previous month and it is closely watched by traders as exports higher than imports show an excedent, and because of that, foreigners that want to buy goods/services need to buy the currency to pay for those goods and services, hence currency market is influenced by such a release.

If actual is bigger than the forecast than this should be interpreted as positive for the currency, and if actual is lower than the forecast than this should be negative for the currency as a whole.

The most important things to take into consideration when looking at the Trade Balance economic indicator are:

  • release date: monthly, about 40 days after the month ends;
  • release time: 08:30 GMT, during the London trading session;
  • actual > forecast = positive for currency;
  • actual < forecast = negative for currency;
  • second tier data.

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