Although 2016 has only just begun, the world of Forex trading has seen some major movements. This has led many astute investors to wonder what the remainder of the year has store. Although predicting discrete values and currency pairs will naturally be a bit challenging, there are still a few variables which are already slated to dramatically affect profits and losses. So, what do some of the major players and market makers believe awaits?
The so-called “Brexit” has been making headlines recently, and for good reason. Most are wondering how the pound will be affected if the United Kingdom decides to sever some of its political (and economic) obligations to the European Union. However, the impact of this is likely to be more social as opposed to fiscal. There is a slight feeling that such a move could be negative for UK businesses; particularly regarding medium-term trade relationships. This may result in a weakening of the pound in relation to other benchmark currencies such as the euro and the dollar. However, the chances for such a move during 2016 are debatable.
Perhaps of greater concern are the recent events surrounding the Schengen-free zone within the European Union. As continued strain is placed upon the influx of refugees, there are worries that countries such as Greece may eventually be forced to abandon their political obligations. This is perhaps more worrying, for the entire solvency of the union could be called into question. Will we witness a massive drop in the value of the euro in relation to other currencies? It should be noted here that Forex traders may indeed capitalise on such weakness should this situation arise.
Many traders are likewise keeping a keen eye on the Asian markets. Weak manufacturing data has hit the Shanghai Composite index hard and analysts feel that this trend is likely to continue into the foreseeable future. As the value of the renminbi illustrates this bearish sentiment, Forex investors are wondering how a regional slowdown could possibly affect the global economy.
However, not all appears to be doom and gloom within the Forex markets. Strong economic data out of the United States has bolstered the value of the dollar and some are even predicting a parity with the euro in the coming months. Such a situation could be an excellent opportunity for astute traders; particularly when taking into account the fiscal doldrums which have plagued safe havens such as precious metals and certain dollar-backed commodities.
Of course, keeping up with the latest Forex trading news is critical to follow the fluid nature of this massive marketplace. Platforms such as CMC Markets provide all of the latest figures as well as late-breaking global events that could have a pronounced impact on any trading strategy. 2016 is certainly set to be a landmark trading year and it will indeed be interesting to see how these predictions develop over time.