The gap between the amount of British imports and exports narrowed to the lowest level in seven months in October, but weakness in trade remained a drag on the country's economic growth. According to the Office for National Statistics, the UK trade deficit in goods was 9.6 billion pounds in October, down from a revised 10.5 billion pound deficit in September. The narrowing of the difference between how much the UK purchases and sells abroad was due to a jump in exports, particularly a rise in silver exports, for which India was the top destination. At the same time, imports fell as Britain bought less oil from countries outside the European Union. This resulted in a much lower trade deficit with non-EU countries. Imports declined by 0.7 million pounds, with fuel imports dropping 0.9 billion pounds.
Meanwhile, strengthening US economy as well as rising employment helped boost tax receipts,
leading to a narrower budget deficit in November compared with the same period in the previous
year, according to the Treasury Department. Washington spent $56.8 billion more than it received,
compared with a $135.2 billion shortfall last year. After suffering from years of sluggish growth,
America's economy has appeared to fire its engines this year even as the global economic growth
has slowed. Hiring by American employers has picked up, as a Labor Department report last week
showed the economy created 321,000 jobs in November, marking 10 months in a row in which the
number has exceeded 200,000.
US core retail sales in today's schedule
The first three days of the week were relatively calm; however, in Thursday and Friday that might change. The main cause for the additional turbulence could be the US core retail sales and unemployment claims that both are expected to worsen and tomorrow US PPI and preliminary UoM inflation expectations will be released.GBP/USD on a gradual down-trend
Already for more than a month GBP/USD is testing the strength of the down-trend, especially its upper trend-line, that started to take its shape on July, when the pair reached a six-year high at 1.7193. The pair's trading range is becoming narrower and that could potentially provoke a break- out. Since the Pound has reached this year's low just recently, we expect a bullish break-out to be the case; however, there still is a downside risk of the pair falling lower, if it fails to breach the monthly R1 at 1.5921.Daily chart
GBP/USD has breached 1.57 level and it is continuing to appreciate, at least that is what it has done for the first three days of the week. The biggest obstacle for further gains is the monthly PP at 1.5755, it stopped the previous rally in the night to today. Nevertheless, the short-term bias remains to be bullish, at least as far as the pair trades above the weekly PP.
Hourly chart