2016 Global Forex Trends

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2016 is shaping up to be another interesting year in the forex sector. While nothing is certain, of course, the following projections can help investors stay abreast of what to expect in the next year.

• United States: It’s expected that US Federal Reserve chair, Janet Yellen, will raise the country’s federal funds rates. While strategists from Goldman Sachs previously suggested that interest rates could rise a ¼ percent each quarter in 2016, Yellen’s statements suggest that a more likely scenario has rates tied to the country’s continued recovery with no fixed schedule in mind.

• Eurozone: In spite of advance press indicating differently, the European Central Bank (ECB) recently slashed interest rates by 0.1 percent, sending the euro rallying strongly against the dollar. This leaves shorts floundering and markets that seemed underwhelmed by the news of the ECB’s plan for the next six months of QE. There is speculation that this is not enough to ensure stability of the market in 2016.

• UK: Softness in the UK markets almost ensures that interest rates won’t rise early in 2016. Both inflation and GDP rates are down more than expected as 2015 nears its end. These figures will need to experience a steady upswing in order to justify raising the UK’s rates.

Guest post by Michelle Custodio of http://magnetictrading.com/.

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