Article investigated trade foreign exchange nexus in Nigeria. This study was also done with a view to detecting
the kind of relationship that exists between the two and also to investigate their co-integration. Annual time series
data for the period 1996 – 2010 was used for the study. The Vector Correction Model (VECM) approach was
employed to determine both the short and long run relationships. Results show that the series becomes stationary
after second difference. The co–integration test reveals five co–integrating vectors in the model, implying the
variables have the same stochastic drift. The study concludes that a long-term relationship exists between foreign
trade and exchange rates implying that foreign trade flows have a strong link with exchange rates in Nigeria.