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Hugo’s Way – What to look in 2018

Forex 2018

2017 was a year of change and growth for the Forex industry and it is heading towards a more legitimate and stable trading environment. This industry evolves and changes constantly, and is very dynamic. The stability has attracted more investors and compelled more authorities and governments to focus on regulation and creating a safety net. The steps taken last year will influence the Forex market and related growth.

Important factors that influence the Forex market in 2017

There are two important factors that influenced the Forex market in 2017 and have changed the way the industry will move in 2018.

  • European regulators started to tighten control and add regulations to the Forex in order to achieve more transparency. Many Forex agencies had to move to less regulated areas or alter their practices by a small margin to retain clients and provide good quality of service.
  • The cryptocurrency boom led to a surge in interest. An increasing number of people want to invest and trade with digital currencies because of their high volatility and potential for profits. This has also led to a surge of interest in Forex trading simply because this market can also be volatile and profitable on occasion.

What is 2018 going to look like in the Forex industry?

2017 started out slow and uncertain but stabilized eventually. The slow growth is due to an uncertain political environment, slow recovery, and subdued inflation. This led to investors gravitating towards safe currencies like CHF as these currencies benefited. 2017 was a year of big political changes with the conclusion of the first Brexit negotiations, the new US tax reform, and better relations between the countries in the EU. All of this is expected to influence the Forex markets and values of different currencies.

This growth is set to accelerate in 2018 thanks to increased confidence in the market, stronger growth, and a more optimistic December. This is what investors can expect during 2018:

  • EURO has been riding high but that trend is likely to shift in 2018 as people start to focus more on monetary policies.
  • GBP hasn’t been doing great since November, despite the rate hike by Bank of England. The inflation is above 3% and the BoE isn’t doing much. There is a strong chance that GBP will rise higher if the inflation doesn’t come down, if markets begin to price out before Brexit.
  • The New Zealand Dollar might follow the same path as its current performance is lackluster.
  • The US dollar is likely to become stronger in 2018 as the Fed’s aggressive hiking pace influences the market prices.
  • Conversely, the currencies like CHF and JPY might depreciate further based on their monetary policies and lackluster inflationary pressures.

The inflation in most world economies is very subdued and most governments are focused on tightening their monetary policies, which will have an influence on the Forex market. The cryptocurrency bubble is still going strong and that will bring more attention to the Forex market so 2018 is bound to be interesting.

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