Money in- and outflows along with a nation’s trade imbalance reflect a currency’s demand and supply and thus its price against another currency. Therefore futures traders observe if a nation has...

Money in- and outflows along with a nation’s trade imbalance reflect a currency’s demand and supply and thus its price against another currency. Therefore futures traders observe if a nation has deficits or surpluses; that is, they look to see if all the above factors affect the value of the contract following changes (fluctuations) in the value of the currencies – changes that could result in a profit or a loss in their positions.