Trade and current account balances are two of the most important reports for forex market traders as they have both direct and potentially long-term implications.

Trade Balance: This report measures the difference between a nation’s imports and exports. If a nation imports more than it exports then it will have a trade deficit. If a nation exports more than it imports then it will have a trade surplus.

Current Account Balance: This report includes financial transfers as well as the trade in goods and services and is, therefore, a broader measure of international trade. Current accounts are also either in deficit or surplus depending on whether a country is a net lender or borrower vis a vis the rest of the world.

Counties with persistently large trade or current account deficits tend to see their currency weaken relative to other currencies and the converse is true.

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