U.S. trade data provides a measure of how competitive the U.S. economy is on a global playing field. In recent years, the U.S. has been running a significant trade deficit which has resulted in considerable outflows of capital from the U.S. in exchange for foreign goods. The impact of an increase demand for the dollar is a rise in price of dollar-denominated assets, and though this can result in long-term uncertainty and risk for the dollar, there are positive short-term effects.
Investor Notes: U.S. Trade Balance, 1230 GMT.
- It is likely that exports dropped more than imports for June, it is projected that merchandise trade deficit to $63.6 billion.
- As a result, it is expected that the total trade deficit will move from $44.8 billion from the $44.4 billion figure in May.
- The U.S. export market has been expanding due to new mining methods of Shale oil and gas through hydraulic fracking.
- Any significant deviations from expectations in the data which could result in revisions of U.S. GDP figures.
- Banc De Binary analysts predict that the trade balance report will show a widening of the trade deficit as a result of a rise in net imports, indicating a potential upward movement in the USD/JPY and USD/CHF and downward movement in EUR/USD.