Ongoing Political Uncertainty
Even though the uncertainty about Brexit has come to an end, there is still a very wide range of other political issues that can affect the forex market. For instance, the political uncertainty between the United States and China, or the rising tensions between Russia and the rest of the world. These political happenings are sure to make a difference.
With many people starting to invest online as a more secure investment, some companies are trying their luck trading forex online with bitcoin and other cryptocurrencies. Though there are some risks trading forex with said cryptocurrencies, the decentralized nature of these currencies makes inflation rate predictable.
When examining interest rates, it’s important to note that low-interest rates lead to momentary economic growth, however, higher interest rates typically causes foreign investments as there is an increase for the currency’s demand. Fluctuating interest rates are sure to make an impact on foreign exchange in 2020.
In order to balance inflation and interest rates, we are set to see an increase in inflation. This could be credited to the Brexit uncertainty wave that engulfed the world markets during the last few years. This trend should subside now that uncertainty about Brexit is gone and will probably Plato until late 2022.
According to Roey Hayon, these 4 factors will have the most impact on foreign exchange in 2020.