U.S. Trade Balance Report: Bad News is Good News?
Mark Whistler is a professional trader with almost 15 years of experience trading stocks, options and Forex on multiple trading floors.
Sign up for a free trial to Forex Force with Mark Whistler, a twice-daily alert service from professional trader Mark Whistler featuring intraday and swing trading setups. Click here to start your free trial.
For Tuesday June 10, 2008: U.S. Report: International Trade Balance for April (8:30 a.m. ET).
The U.S. Trade Deficit isn’t chump change by any means… in March, the deficit clocked in at $58.21 billion; amazingly though, the event had some jumping for joy. The trade deficit result witnessed in March was actually a 2.9% decline from February, a significant turn of events for the U.S. Much of the narrowed deficit can be attributed to the falling greenback, which is helping bolster American exports.
In fact, in 2007, strength from the U.S. trade deficit actually added 0.6% to full year GDP growth. If the rock-bottom U.S. Dollar is doing one good thing for America, helping to take some edge off the trade deficit would be it. At the end of the day, the more the U.S. Dollar drops, the more attractive U.S. products are to other countries who can buy cheaper goods from the U.S., based on exchange rates alone.
On Tuesday, the market will see trade deficit numbers for April and at present, most analysts are looking for a slight increase to the tune of about $59.4 billion. However, it’s important to remember that the U.S. Dollar hit an all time low on April 22, which could actually cause a surprise decline.
Looking at the EUR/USD, if the trade deficit comes in better than expected, the U.S. Dollar could actually see some buying support, as economists infer the recent surge in exports will help 2008 GDP growth come in at, or above expectations. On the other hand, if the Trade Deficit widens unexpectedly, dollar bears could easily show up in force.
Would you like to learn the strategy I used that booked 792 PIPs in just six weeks? CLICK HERE to learn how I did it.