Sunday, December 28, 2008

How to Read And Interpret A Weekly Economic Calendar: International Trade

Measures the difference between imports and exports of both tangible goods and services. The level of the international trade balance, as well as changes in exports and imports, indicate trends in foreign trade. Changes in the level of imports and exports, along with the difference between the two (the trade balance) are a valuable gauge of economic trends here and abroad. Furthermore, the data can directly impact all the financial markets, but especially the foreign exchange value of the dollar. Imports indicate demand for foreign goods and services here and
the US exports show the demand for US goods in overseas countries. The dollar can be particularly sensitive to changes in the chronic trade deficit run by the United States, since this trade imbalance creates greater demand for foreign currencies. This report gives a breakdown of US trade with major countries as well, so it can be instructive for investors who are interested in diversifying globally.

For example, a trend of accelerating exports to a particular country might signal economic strength and investment opportunities in that country.

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