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Trade Balance

Importance: Great ***

Influence: Forex, Equity Markets

US Release: monthly between the 8th and the 12 day of each month (two months prior -each month is released the figure of two months ago) by the US Bureau of Economic Analysis

EU Release: Europe’s International Trade figure is released monthly between the 13th and the 18th day of each month (two months prior -each month is released the figure of two months ago)

 

Introduction to the Trade Balance Account

The trade balance of a country is a general measure of the country’s competiveness. The trade balance is simply calculated by deducting imports from exports:

□ If exports exceed imports then a country is enjoying a trade surplus.

□ If imports exceed exports then the trade balance is negative and the country suffers from a trade deficit.

US Trade Balance

 

The Effect of Trade Balance in the Forex and Equity Markets

The effect of trade balance is almost common for all markets. A better Trade Balance (higher surplus or lower deficit) the better for the domestic currency and the domestic equity markets.

◙ The higher the Trade Surplus the better for the domestic currency and for the domestic equity markets.

◙ The higher the Trade Deficit the worst for the domestic currency and for the domestic equity markets.

 

Related Links: US Bureau of Economic Analysis | ► Eurostat

 

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What is the Trade Balance?

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