On January 14, 2013, CNBC predicted that this year there would be a currency war between countries, in which more and more countries would devalue their currencies to boost their economies. Most of us in the Forex market use some form of Forex software to make trading decisions. Even so, owning one is still beyond the reach of the average person. Therefore, in this article, an attempt has been made to bring together the various currency forecasts that economists are giving about 2013.
Finding Currency Trends Before Using Forex Software
Many forex experts predict that 2013 will be a pivotal period for major currencies. Some have predicted that although the US dollar, GBP and JPY could weaken, commodity currencies are expected to strengthen towards the end of the year. The monetary policy of the ECB and the Federal Reserve also suggests that the euro / US dollar may appreciate. Current forecasts suggest a more positive outlook for US growth than in the eurozone. Let’s take a look at what is available for major currencies:
- US Dollar (USD) – The US dollar will be affected by movements in the labor and housing markets, the Fed’s monetary policy and the “financial rock” results. The foreign exchange market is expected to see improvements in the wage and housing sectors. On the other hand, once the effects of the “financial rock” become clear, the Fed will need to reconsider its monetary policy. Keep track of progress on spending cuts and debt ceiling.
- Euro (Euro) – Although positive sentiment is still associated with this unified currency, positivity may not last long unless there are some signs of economic growth in the region. If Spain does not sell 20 20 billion in bonuses, investors should be on the lookout for a possible bailout move. An international bailout could end the uncertain balance in the eurozone at the end of 2012.
- British Pound Sterling (GBP) – While the UK economy continues to struggle with a sluggish economy, its central bank has not yet considered a quantitative easing measure. However, some rumors about the possibility of a QE program in early 2013 have been circulating recently. If the Bank of England implements such a scheme, there is a possibility of selling GBPs in the foreign exchange market.
- Japanese Yen (JPY) – There is speculation that JPY will weaken against the US dollar in 2013, with a decline of at least 10%. The Shinzo Abe government and the new BOJ governor (to be announced in April 2013) are expected to succeed in devaluing the JPY. However, if the eurozone environment deteriorates, both the US dollar and the JPY could be safe havens.
- Swiss Franc (CHF) – One of the major factors affecting CHF is whether the Swiss National Bank removes its pole at EUR / CHF of 1.20000. Switzerland will need to reconsider its pole, either to restore the CHF to a safe haven or if the EUR / CHF pair starts to rise.
Forecasts to win trade in 2013
On our forex trading for the year is:
- USD / CAD – Even the minimum conservative estimate is at US 6 0.9600, with only a handful of analysts predicting parity in 2013. Any price above par would be a good opportunity to sell US dollars and buy CAD.
- GBP / USD – Analysts are currently divided over the direction GBP will take against the 2013 USD. If the BoE implements the QE program, the GBP will strengthen, although its reversal is likely to be less than 1.64.
- EUR / CAD – With CAD expected to strengthen in 2013, many analysts have recommended selling EUR and buying CAD this year.
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