GBPUSD falls on trade balance today. The pound sterling went on a free fall again as UK’s trade balance fails to make market expectation.
The forex market gave the pound sterling, a bloody nose on every sterling, GBP pair and crosses across board today as report of trade balance with the rest of the world weakened.
This further highlighted the forex market apprehension on the UK economy and the pound sterlings. For example, we traded the GBPJPY cross to 139.40 until trend reversal and then to 135.88.
At the time of writing that cross has shed over 360 pips from today’s high. How could this trust be gained back to stop the pound sterling, GBPUSD bleed?
Cable, GBPUSD on the other hand, was hit by the news and it went on a free fall as seen above on the chart to 1.4683. It is great we are having a new Government that has pledged to put a curb on the excessive borrowing. But what is also clear are traders’ lack of confidence on UK economy at present.
In conclusion, the forex market reaction to the trade balance report is a great indication of how badly the pounds, GBPUSD need a salvation. Immediate action are required to stem these GBPUSD falls before investors start taking flight to other safe haven currencies. That could only make matters worse which could put the economy in a very bad shape for now.
