North American trade data shows narrowing deficit in the US
The latest US trade data has shown a narrowing in the goods trade deficit, with the goods balance in from $55bln to $52.5bln. While this does not mark a huge improvement, it is at least moving in the right direction, though for the White House administration to take note, we would need to see it contracting much more.
President Trump is trying to get China to buy more agricultural products from the US, so this would have an impact down the road, but for now, modest narrowing is all that we can expect so do not expect too much of an impact on the USD.
In fact, the USD has been clawing back some ground in the last day or so, and with EUR/USD below 1.1100 and USD/JPY eyeing a move back above 109.00, we sense the market is reluctant to give up on the greenback just yet, though in the latter case, the JPY has been on the back foot due to heightened expectations of a phase one trade deal with China.
EUR/USD may well find some support from the mid 1.1000s', but even from current levels, there seems to be little conviction in the down move, which suggests there is a little more 2-way flow in the USD pairs than we were used to seeing earlier on in the year.
Canadian trade data also saw a narrowing in the deficit, though only due to a downward revision to the prior month. Markets were expecting a reading of C$700mln but came in at just under a billion C$. Both imports and exports missed on expectations also, though naturally, more so exports. This has had very little impact on the CAD, which remains in the lower half of the 1.3100's.