15.01.2020 | Issue #53 | FX Monthly
What to watch for in 2020 – As eventful as 2019 was, it didn’t move currency markets very much. So, what’s in store for 2020? There are a number of potential stories to watch, but will they play out or will central banks stay in control? Our outlook.
Will China save the global economy in 2020? – 2019 was an unusual year for global trade. Despite solid economic growth, global trade activity shrank – the last time this happened was during the financial crisis. In addition to trade disputes and tariffs, an economic slowdown in China also contributed to a declining world trade. We think things are looking up for China in early 2020, but will that be enough to lift the global economy? Our thoughts.
Exchange rates, short-term shocks and long-term valuations – The 2020s started off with a stress test: a surge in Middle East tensions. Oil and gold outperformed the US dollar, as did the traditional currency safe havens. The new year offered a stark reminder that short-term shocks often have a bigger impact on exchange rates than long-term equilibrium models can predict. But there is value of knowing the fundamentals. Our assessment.