Forex Forecast: 3 Major Factors to Watch in Q1 2016

1
Forex Forecast 3 Major Factors to Watch in Q1
2016
2
Market Volatility Returns in 2016
In the first quarter of 2016, the Forex markets
have become rather volatile. There are a number
of macroeconomic factor that are contributing to
the volatility, including the U.S. Federal
Reserves December interest rate increase, a
Chinese economic slowdown, and sinking global
energy prices. Forex traders must recognize these
factors, which could impact Forex transactions
throughout the first half of 2016.
3
European Central Bank Action in Q1
The Euro Zone is experiencing period of slow
economic growth, compared to the US and UK
economies, but inflation has remained in control.
The Chinese slowdown, though, has also
discouraged investment, because China is the
European Unions No. 1 trade partner.5 Plus,
Britians possible exit from the Euro Zone, as
well as a possible quantitative easing expansion
could also affect Euro values. As a result of
these factors, the Euros value will likely
remain stagnant or decrease slightly in 2016.
4
US Federal Reserve 2016 Forecast
Towards the end of last year, U.S. interest rates
were raised a half percentage point by Federal
Reserve. Yet inflation has increased
unexpectedly, and the Fed will not likely raise
interest rates aggressively this year. Forex
traders must keep an eye on interest rates, with
possible Fed action coming each quarter, as any
action will impact the US dollars value.
5
Oil and Commodity Prices
Oil prices have hit a decade-plus low, and they
are slowly rising in 2016. The slow price growth
has affected a number of net energy exporters.
For example, the Canadian dollar, has been
adversely affected by stagnant energy prices.
Globally, commodity prices have declined with
minimal growth, thanks in part to the Chinese
economic slowdown. As a result, countries that
rely on strong commodity prices, like Australia,
have experience declining currency valuations.
6
Contact Us
Suite 501 132 Arthur Street North Sydney 2060
NSW Australia
Address
61 2 8412 6000
Contact
info_at_learntotrade.com.au
Email
View Larger Map
Website
www.learntotrade.com.au