Forecasts of the currency market for 2019: questions that have not been answered yet
Forecasts of the currency market for 2019 are very cautious. 2018 was a year of global instability with many negative phenomena. Moreover, many questions still do not have answers. Experts are extremely reserved in responding to requests for comment on certain issues. The world is on the verge of global change, so it is extremely difficult to predict the movement of major monetary units.
What are the forecasts on the currency market for 2019?
In order to predict more or less accurately the movement of currencies, you first need to answer many questions. The main problems that complicate the analysis are the tightening of the policy of the Federal Reserve System and the slowdown in the development of the Chinese economy, the main cause of which was the “trade wars” with the United States. The International Monetary Fund was forced to worsen its own forecast twice in the last 3 months.
Paresh Upadhaya, an expert from Amundi Pioneer Asset Management, believes that the main difficulty in predicting exchange rates is uncertainty about the FRS’s future actions. The authorities of the United States stated that the US Central Bank must show “patience and flexibility”, thereby confirming caution. Traders suggest that if policy tightening does occur, it will not be significant. Upadhaya is confident that the deterioration of the financial situation, the problem with profitability and the slowdown of the US economy, even the risk of recession, will force the FRS to take a break. Thus, investors can pay attention to riskier assets such as the Colombian peso.
Noel Corum, an employee of Invesco, spoke about the impact of China’s problems on the world course. The expert believes that the main issue in the global economy is the measures that the Central Bank of the PRC will take to save production. If the decisions made are sufficiently effective, then risky assets and credit markets will grow. The influence of the Middle Kingdom on the global economy is too great just to close eyes to it.
US authorities say that the States and China are still very far from solving problems. The economy of China continues to slow down, and negotiations do not give the desired result.
Experts fear that the economic crisis of the Middle Kingdom may also bring down the markets of developing countries. However, Noel Corum is optimistic. He believes that the Central Bank of China will find the necessary options to save the economy, and he sees the prospects for the dollar not rosy. There is a high probability of inhibition of US GDP growth, due to than the dollar will weaken. Accordingly, you can put on the growth of the euro.
Steven Jen, head of Eurizon SLJ Capital, recalls that not only China is experiencing problems, but the entire economy of the planet. The IMF warned about
The minimum rate of growth of world GDP, the figure will increase by about 3.5%. The Fund emphasizes the deterioration in demand in Europe. Given this factor, Jen believes that the euro is not credible. A negative sentiment to the dollar should be discarded. The expert is confident that the US has more opportunities to cope with the crisis than the EU.
Another major issue is the political crisis in the United States. When will the shutdown in the US government end? How will the investigation into the case of Muller about the intervention of the Russian Federation in the American elections? Pares Upadhaya is convinced that Trump will try to block the publication of the results of the investigation, which is another risk for the dollar. Under these conditions, the expert recommends paying attention to the safest assets, such as the Swiss franc, yen, and gold.
