Economic activity across the globe and the foreign exchange market has suffered drastically over the last 1.5 years due to the ongoing pandemic, Covid-19. Foreign currency is usually bought and sold based on the desire of the investor to manage their risk exposure rather than on their fundamentals.
However, in 2021 a shift in attention to individual fundamentals has been a major contributing factor due to the pandemic. Some of the major events found in Forex Trading Latest News that took place during the year-mid months are as follows:
A) U.S. Dollar
At the end of May, the USD turned negative for the first time this year because the economic path for the country has been difficult given the presidential elections that took place.
While the American dollar has suffered and there is a risk of inflation, the Federal bank has expressed that this high inflation rate should ideally fall within the coming months. If the high inflation continues to persist, it will push the national output upward, thereby making the dollar stronger.
B) Great Britain Pound
In May, the British Pound peaked at a three-year high as solid evidence of the economy’s recovery in the United Kingdom. Irrespective of the threat of a Covid-19 variant emerging, forex trading latest news reflects the British economy continued to open slowly, which led to movements within the economy’s business cycle.
The stock market has been at its highest since 2014, thereby positively impacting the British currency and making it more robust in foreign exchange. Sterling’s monthly gains concerning that of Euro were a little less fascinating given the recovery in Europe with the help of the vaccine.
C) Australian Dollar
The Australian currency broadly remained stable during May and June even though some significant losses were observed compared to other European currencies. The Australian dollar was lagging in 2021 as leaders led the country into multiple and extended lockdowns, slowing down the entire business cycle within the economy.
The market’s primary focus is now on reopening with the quick-rolling out of the vaccines so that the value of their currency receives a strong push with an increase in trade.
D) Chinese Yuan
In May, the Chinese yuan was higher than expected as experts forecasted that the growth would be slow. It moved up to a three-year high concerning the USD in the following month. Even though the currency has only gotten more robust, it is not the best thing for China as an increase in currency rate increases the price of exports on which most of the Chinese economy thrives.
Given the unsound nature of relations that the Chinese government has with the rest of the world, the country needs a more robust and better economic policy to maintain the economy and a robust rate in the foreign exchange market at the same time.
The year has turned out to be highly volatile for the foreign exchange market, and a similar track is expected in the coming year.
According to forex trading latest news, The focus of the market will be on the fate of the U.S. dollar, which will be bearing the pressure of the world’s expectations as it will impact every other currency.