The indicator reflects the difference between the total value of Swiss exports and imports. Due to its small population and limited resources, foreign trade is very important for the Swiss economy and trade statistics can have a significant impact on markets.
Switzerland's major trading partners include Germany, France, Italy and the United States. While Switzerland still exports large amounts of traditional products like chocolate and watches, today more than half of Swiss exports are in mechanical and electrical engineering and chemicals.
A positive Trade Balance indicates a trade surplus, and a negative balance represents a trade deficit. Trade surpluses indicate that foreigners are buying Swiss goods, which are typically paid for in Swiss Francs. This translates into greater demand for the currency and upward pressure on the value of the Franc. During a trade deficit, Swiss consumers have a higher demand for foreign currencies and this places downward pressure on the value of the Franc.