Charles Aaron J507 Anderson

翻訳の表示

How do trade balances affect forex markets?

A trade balance measures exports minus imports. Surpluses support currencies (more demand for local currency), while deficits weaken them. For example, Japan’s large trade surpluses historically strengthened JPY. Institutions track monthly trade reports, while retail traders can interpret chronic deficits (e.g., U.S.) as structural currency pressures. Benefits: insight into long-term flows from real economic activity. Risks: capital flows can offset trade effects, e.g., U.S. deficits balanced by global demand for Treasuries. Trade balance shows that forex reflects not just speculation but real goods and services moving across borders.