Both the United States and United Kingdom have posted a narrowing of their respective trade deficits giving a boost to the sense of optimism that the world’s leading Anglo nations are on course for economic recovery and lowers the chance of a downward revision to their quarterly GDP figures.
The British economy received a boost today as the latest trade deficit data showed that the nation’s deficit shrank by £8.4 billion in September, down from the £10billion reported in August. Economists had been a predicting a deficit of £8.9 billion.
The UK faces a tough few months ahead if it wants to keep its recovery on the right track. Initial data for October shows that UK companies have reported a drop in export orders for October as the Eurozone slides ever closer to recession. Exports to the troubled region were 2.5% lower than the previous year whilst exports to the rest of the world saw an increase of 13.3%.
The United States trade deficit has fallen to a two year low as exports to the wider world reached an all-time high. The deficit for gods and services fell to $41.5billion in September raising hopes that the US economy is on course for a strong recovery.
Exports rose by 3.1% to $187billion after being driven by sales of aircraft and heavy machinery, imports also increased in September rising by 1.5% or $228.5 billion. The trade data comes a week after the Conference Board Consumer Confidence Index showed that sentiment among US shoppers had risen to a five-year high.
The most recent official figures showed that the US economy expanded at an annualised rate of 2% in the three months to the end of September, more than had been expected.
The gradually improving situation of the Anglo nations shows that those nations are beginning to outstrip Europe by some margin suggesting that the UK could adopt a new export strategy to continue making economic improvements. By trading with the wider world and lessening its reliance on Europe the UK has the potential to trade more with the rest of the world.
The Pound to Euro exchange rate is currently trading at 1.2534
The Pound to US Dollar exchange rate is currently trading at 1.5950
The Pound to Australian Dollar exchange rate is currently trading at 1.5328
The Euro to US Dollar exchange rate is currently trading at 1.2727
The Euro to Pound exchange rate is currently trading at 0.7977
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