Taiwan's trade surplus widened slightly from $4.68 billion in June to $4.83 billion in July. Exports rose 3.1 percent after increasing 23.5 percent previously, while imports rose 16.2 percent after a previous increase of 33.9 percent.

More subdued headline growth in exports was largely driven by slower but still very strong exports of information, communication and audio-video products, up 42.4 percent on the year after surging 114.1 percent previously, with exports of electronic components also weakening from growth of 7.3 percent to a year-over-year decline of 12.0 percent. Exports to the United States increased 70.3 percent on the year, while exports to mainland China and Hong Kong fell 13.5 percent. Petroleum imports recorded slower growth, while imports from mainland China and Hong Kong recorded another month of solid growth.

Taiwan's trade surplus is forecast to widen to $6.51 billion in July after shrinking to $4.68 billion in June from $6.05 billion in May. The year-over-year increase in exports is expected to slow from a 23.5 percent surge in June while imports are seen moderating at a faster pace after a 33.9 percent jump.

The international trade balance measures the difference between imports and exports of both tangible goods and services. Imports may act as a drag on domestic growth and they may also increase competitive pressures on domestic producers. Exports boost domestic production. Trade balance values are calculated by deducting imports (cif) from exports (fob). The level of the international trade balance, as well as changes in exports and imports, indicate trends in foreign trade and can offer a guide to an economy's competitiveness.

Changes in the level of imports and exports, along with the difference between the two (the trade balance) are a valuable gauge of economic trends here and abroad. While these trade figures can directly impact all financial markets, they primarily affect currency values in foreign exchange markets.

Imports indicate demand for foreign goods and services in the local economy. Exports show the demand for local goods in countries overseas. Movements in the trade balance directly affect GDP growth because of Taiwan’s high reliance on trade. Stronger exports are bullish for corporate earnings and the stock market. The bond market is also sensitive to the risk of importing inflation.

This report also gives a breakdown of trade with major countries as well, so it can be instructive for investors who are interested in diversifying globally. For example, a trend of accelerating exports to a particular country might signal economic strength and investment opportunities in that country.