Annual Review & 2019 Outlook
On 2018, the United States (U.S) Federal Open Market Committee (FOMC) raised interest rates four times, settling the benchmark overnight lending rate at 2.50% by December 2018.
Moving along 2019, the team here at FintechFX expects the FOMC to hike Interest Rates two more times, which would then bring up the benchmark Interest Rate to 3%. At this level, the team here at FintechFX view that a 3% Interest Rate environment to still be conducive of inflation. In addition, the highest rate post the U.S Subprime crisis would most certainly encourage greater foreign inflows into the United States. Nonetheless, the team views that the U.S Dollar (USD) would eventually weaken as other economies such as the United Kingdom and the European Union move to increase Interest rates during 2019.
On the perspective of global politics, there are a few developments which would risk economic stability moving along 2019. These risks have been identified by the team here at FintechFX as follows:
- The political climate between U.S and China in relation to trade and tariff wars
- The Brexit or No-deal Brexit which is scheduled to take place on March 2019
- U.S stance in general in regards to tariffs imposed and the escalating tensions within the WTO
- The falling price of Crude Oil and the actions to be taken by the affected nations
- Growing Japanese debt and it’s overall sustainability
- The European parliamentary election and the potential escalations in tensions which might follow
2019 is anticipated to be a pretty exciting year. The risk factors mentioned above are ample but should not be too drastic encouraging good two-way trading volatility moving forward. The team here at FintechFX view that gold for one, could set to see 1,400 this year. Currently, the commodity prices at USD$1,271 per troy ounce.
The USD/CAD and the GBP/USD both look like pretty promising pairs to monitor moving forward. However, in view of less news events and lack of liquidity for this week, it is in our best interest to refrain from making any rash trading calls moving along this last week of 2018. The team will continue to update further on our trading ideas regarding these two pairs in our next review.
Source (Charts): https://www.investing.com
Source (Economic Calendar): https://www.forexfactory.com/calendar.php
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