Fed Hike and Brexit to Dominate Headlines this Month

Even though January is typically a slow month for most economies worldwide, the U.S Fed rate hike and Brexit issues are set to dominate headlines during the first month 2019.

Major Currencies Start the Year with a Bang

The major currencies started the year strong despite the major concerns in the global financial ecosystem. The safe-haven Yen led the pack while the greenback recorded losses, especially against the Sterling last week and ended the week trading at $1.2739 to the Pound, which signified a 0.34% fall for the week. The U.S. government shut-down may be affecting the performance of the greenback, and once the situation is resolved, we may see the USD bounce back.

Against the Euro, however, the US Dollar performed better, recording a healthy growth of 0.28% to close at $1.1413 against the shared currency. The greenback also fell behind against the Japanese Yen, ending the week at 108.3 Yen to the Dollar which signifies a 1.9% drop in the first week of the year.

JPY was also strong against the Euro as it went up by 2.2% against the currency to end the week trading at 123.6. The Euro also lost out against the Sterling last week, dropping by 0.62% to end the week at 1.1162.

January Fed Rate Hike, Brexit Issues

The attention of financial traders and investors during January 2019 will be focused on the monetary policy guidance from the Fed and the ECB. Brexit is another issue expected to make the headlines this month as the issue continues to affect the performance of the Pound Sterling.

With the ECB and the Federal Reserve making big announcements towards the end of last year, traders are not expecting to see any significant changes in their policies this month. The Fed is set to hold its first monetary policy meeting later this month, and traders will pay keen attention to it as the effect of the last rate hike continues to affect the economy. The ECB meanwhile will not hold any monetary policy meeting this month.

The Bank of Canada is expected to hold its meeting this week. There is uncertainty among investors regarding a rate hike by Canada’s apex bank at the start of the year. The country has experienced mixed economic data recently as the labor market continues to show that more slack is being absorbed

In its previous meeting, the Bank of Canada left the interest rates unchanged but pointed out that a rate hike would be dependent on the economic data recorded.

The March 29 deadline for Brexit draws closer, and the matter continues to affect the GBP as there is still no deal agreement with the EU. This implies that January will bring along uncertainty for the British currency and the Euro as well.

Even if the British Pound starts the month on a quiet note, it is expected to be highly volatile as the country could face a no-Brexit deal or a hard crash out from the EU.

Forex Signals in January

The ForexSignal Trading Team has been monitoring the Forex volatility closely and we will be sending more signals as stronger direction becomes apparent towards the middle and end of the month. We look forward to exciting Forex trading as the weeks progress and the worldwide financial situation unfolds.