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.
The macro perspective
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.
FX market talk
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.