Taking a Fundamental Approach to Forex Trading

Trading the Swiss Franc with the Swiss Trade Balance

The Swiss Trade is an important economic figure released monthly by the Swiss National Bank (SNB). Calculated in billions of Swiss Franc; the publication is a preliminary estimate of Switzerland's international trade in goods and services on a balance of payment basis and merchandise imports and exports statistics on a recorded basis. When the value of imports exceeds the value of exports, a trade deficit is created; and, when the value of exports exceeds the value of imports, a trade surplus is created.

Switzerland Main Exports Commodities	Switzerland Main Exports Partners
Machinery	Germany 21.5%
Chemicals	US 9.5%
Watches	France 8.6%
Agricultural Products	Italy 8.4%
Metals	UK 5.3%

Switzerland Main Imports Commodities	Switzerland Main Imports Partners
Machinery	Germany 27.3%
Chemicals	Italy 10.1%
Watches	US 9.1%
Agricultural Products	France 8.1%
Metals	Russia 7.6%

Impact on the Swiss Franc
Switzerland is known for its strict agriculture protectionism policy (through levying high duties on the imports of agricultural commodities). Apart from that, trade contributes heavily to the Swiss economy; and hence the Swiss trade balance plays a significant role in anticipating the potential movement of the Swiss Franc. Since January 2003, Switzerland has enjoyed a robust trade balance. For that, currency traders shouldn't focus on the Swiss absolute value of the trade balance. But rather, they should analyze its monthly and annual percent of change. In the short term, a positive change would appreciate the Swiss Franc while a negative change would depreciate it.