Forex: UK Good’s Trade Balance better than expected

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Trade Balance figures for the month of February have been announced in UK. The announced figure of a £6.776 billion trade deficit was substantially better than the £8.1 trade deficit than the market expected and also better from January’s £7.06 trade deficit. Despite the data being hawkish for the currency it was not able to help the sterling as it suffered a near 75 pips and 40 pips against the Euro and USD respectively following the announcement of the very weak CPI for UK.

The trade balance figure shows the difference in price between exports and imports in the goods a country performs. A higher reading than what is expected would be usually associated with hawkish behavior of the currency as it shows more usage of the currency abroad for purchasing exported products. A positive figure is called trade surplus while a negative trade deficit.