Prior month $-73.1 billion revised to $-73.0 billionGoods trade balance $-102.84 billion versus $-96.56 billionServices surplus $24.3 billion versus $24.2 billion last month
other details:
Exports +0.5% versus +1.7% last month.Imports +2.1% versus +0.6% last month.Total exports $266.6 billion versus $265.279 last month. Higher Total imports $345.39 billion versus $338.28 billion last month. Higher.Capital goods imports $83.45 billion versus $80.188 last month. Higher.Trade deficit with China -$30.12 billion versus deficit of $-22.18 last month.July oil import price $75.96 versus $74.113 last month. +11.5% from last year’s $68.11
The trend in the trade deficit is continuing to increase (see chart above). If the US has a large trade deficit, the “standard” reaction should be for the USD to decline. Why? If the US dollar moves lower, the price of import rises and the relative value of US exports go down.
What may be happening is importers in the US are pre-buying ahead of the elections. Trump is in favor of using tariffs on goods imported into the US. So buy them early to avoid the increased cost.
This article was written by Greg Michalowski at www.forexlive.com.
