After The August “Snooze,” What’s Ahead For Forex?

Traditionally, this time of the year, volume and volatility is down substantially, as Forex traders take advantage of the summer break. Of course everyone is glued to their TV’s as the Olympics dominate the air waves. Yet, there are few different dynamics in play this year, especially coming up in the next few days.

Greenback

Once again the USD will dominate and we expect to see some increased volatility as the markets anticipate the FOMC minutes and the July Consumer Price Index (CPI). Another hot topic is connected to US stocks. All 3 American benchmarks are now at record highs as is the Russian stock market.

The Cable And The Brexit Fallout

The GBP continues to track lower against the greenback and is trading at its lowest level since 1985. It appears the Brexit decision to leave the EU has continued to weigh hard against the British economy and until such time as confidence is gained in an economy that is typically resilient and very strong we expect further erosion towards the 1.2500 level against the USD.

Global Economies

At this stage it looks more than likely that central banks will continue to provide stimulus and far looser monetary policy will prevail with no end in sight at this stage. Worldwide record low interest rates and bond prices leaves investors and institutions with no other option then to continue buying up stocks in the major world economies. There aren’t too many other options available at this time.

Traders are nervous every time a new market high is made and the ripples are being felt in the Forex market. We look forward to seeing what unfolds in the weeks ahead. The good news is this will continue to impact Forex volatility whatever the outcome; be it a rising or falling market.

As always our Forex Signal Trading desk will be actively monitoring the markets looking to identify winning trade possibilities as they unfold and making sure our clients are notified of these anywhere in the world.