Market importance: High importance.
Meaning: Indicates the budget execution situation and has an impact on the current account.
Release time: 8:30 a.m. Eastern Time.
Frequency: Monthly.
Coverage period: The most recent month.
Revision situation: The possibility of revision is very high.
The budget deficit data is released by the Treasury Department every month, mainly describing the government’s budget execution situation, indicating the government’s total income and total expenditure situation. If the income is insufficient, it is a budget deficit. If the income is greater than the expenditure, it is a budget surplus. If the income and expenditure are equal, it is a budget balance.
Foreign exchange traders can use this data to understand the government’s actual budget execution situation and also use it to predict whether the Treasury Department needs to issue bonds or treasury bills to make up for the deficit in the short term because short-term interest rates will be affected by whether or not bonds are issued.
Generally speaking, the foreign exchange market is skeptical of the government’s budget deficit. When the deficit increases, the market will expect the currency to go down, and when the deficit decreases, it will be good for the currency.