The global recession has caused a dramatic change in global trade. Countries that have traditionally ran trade surpluses are reporting trade deficits while countries that have traditionally ran trade deficits are beginning to turn trade surpluses. On Thursday for example, the U.S. reported its smallest trade deficit since 1999. Unfortunately the changes in global trade balances have been primarily driven by a sharp contraction in demand. Imports have been declining but the problem is in exports, which has plunged across the board. The only comforting factor is that everyone is facing the problems. On the most fundamental level, currencies move based upon supply and demand and trade represents some of the biggest supply and demand flows. Therefore the change in trade has and will continue to play a major role in the price action of a currency pair.