While 2018 may still be in its infancy, the risks hanging over the year’s foreign-exchange (forex) markets have been brewing for some time. An assortment of global hotspots are positioned to affect major currencies and their viability on forex markets.
“Openness brings progress for ourselves, seclusion leaves one behind. China will not close its doors to the world; we will only become more and more open.”
On May 24, Moody’s reported that it had downgraded China’s long-term local currency and foreign currency issuer ratings from Aa3 to A1. With the downgrade, China’s credit rating is now on a par with those of Israel, Japan and Saudi Arabia.
The stability of the global economy continues to oscillate between intermittent recovery and general unease, and the new US presidential administration stands at the crux of its ongoing uncertainty. Various international incidents have influenced the condition of the global economy—the ongoing Brexit saga
China is investing heavily in financial technology while the rest of the world is lagging behind, propelling the country to the forefront as the global leader in the fintech revolution. A favorable regulatory environment and a welcoming, underbanked domestic population are a few of the factors contributing to this eastward fintech migration.
After several years of rather unspectacular market activity, gold came roaring back in 2016. The year saw investment demand for the precious metal rise by 70 percent, while gold-backed exchange-traded funds (ETFs) experienced their second-highest inflow of investor interest on record.
It is no secret that China has been facing serious problems related to its mounting debt levels. The growing pile of bad loans, especially from the country’s corporate sector, has raised red flags at many of the world’s leading research institutions.
In a year marked by political change across the globe, the closing weeks of 2016 delivered yet another moment of significant upheaval. Following weeks of public protest, South Korea’s parliament voted to impeach President Park Geun-hye on December 9, while the first public hearing to kick off the trial was scheduled for January 3, 2017.
Much has been made of Europe’s struggling banking sector since the turn of the decade. In October, for instance, the International Monetary Fund (IMF) reported that across the world, banks that were in charge of approximately $12 trillion of assets will continue to remain vulnerable, even if a global economic recovery takes hold.
Across the world, governments are increasingly acknowledging the need to raise the levels of investment in infrastructure projects within their respective countries.