Trading British Pound with UK Trade Balance

Each month the Office of National Statistics (ONS) reports the UK trade balance. This is a very important economic indicator in London. Essentially the UK trade balance measures the difference between the value of exports and imports in the UK, and is shown in billions of Pounds.

This economic figure compares the UK trade activity with the rest of the world, and evaluates it in three categories: Goods only, Services only, and Goods and Services.

United Kingdom – Main Exports	United Kingdom – Main Export Partners
Manufactured Goods	US – 13.9%
Fuels	Germany - 10.9%
Chemicals	France – 10.4%
Foods	Ireland

United Kingdom – Main Imports	United Kingdom – Main Import Partners
Manufactured Goods	Germany – 13.9%
Machinery	US – 8.9%
Fuels	France – 6.9%
Food Stuffs	Netherlands – 6.6%

How to trade this economic indicator:

Due to the fact that this indicator is a direct input to the balance of payments, it is heavily used when speculating upon the price movement of the Sterling. Over the past ten years, the UK has realized a deficit on average. To trade off of this figure, Forex traders should focus on the monthly percentage change in the deficit. If the deficit were to grow, or widen, traders could expect a slide in the price of the Pound. On the other hand, a shrinking deficit would likely lead to a rally in the Pound.