Events That Will Shape the FX Market at the End of 2019

November‘s US Nonfarm Payrolls released on December 6th (EST) sits at 266k, much higher than expected, and unemployment rate dropped from 3.6% to 3.5%, the lowest in nearly a decade. A robust job market seems to indicate a rally in US economy, which kindled market discussion about the US Federal Reserve’s future monetary policy. Usually, the NFP of Decembers first Friday is considered to non-officially wrap up the year, but this year seems like an exception.

UKs general election that will soon take place is definitely a spotlight event.

Public opinion poll shows that the Conservative Party, despite its falling support rate, is still ahead of the Labour Party by double-digits. But some also note that the situation resembles that in 2017 when many expected the Tories to win a majority. Currently, the sterling has surged to a record high in 7 months against both US dollar and euro as the market anticipates the Brexit outcome and leaves the market vulnerable to a “buy the rumor, sell the fact” type of activity. The upcoming election will definitely lead to great volatility of the GBP, drawing much attention from the market.

Another big news likely to affect the forex market is President Trumps decision on tariffs. China-US trade war has lasted for over a year, with ongoing negotiations between the 2 countries. President Trump had previously announced an additional 15% tariff on approximately US$1.6 trillion of imports from China, including many consumer goods. But given that the US had postponed tariff raise twice before, and President Trump also sounded rather upbeat in his recent remarks, implementation of the tariff will likely be put off again. For investors, this indicates a truce, which they definitely wish to see last longer. If the US insists on raising the tariffs, the stock market and risk assets could plunge while the yuan would likely weaken in a knee-jerk fashion. China will have to react and increase its tariffs as well. The falling demand due to less competitive exports, combined with rising import costs brought by the new tariffs, will deal a new blow on the economy.

In addition, the newly elected ECB President Christine Lagarde will soon host her first monetary policy meeting as head of the EU central bank. Although there aren‘t much big changes expected from the ECB, the market still look forward to any decisions from the meeting that may signal the bank’s future policies.

Although its near the end of the year, the forex market remains subject to the influence of many major events. And as a leading forex media, WikiFX continues to present market news and analysis for investors. You may also visit WikiFX website, App or Facebook page to view more information.