While trading during the summer months can often be considered challenging because of lower volatility, this summer looks like an exception to the rule and has already been full of surprises.
Keeping in mind the trade tensions between China and the US, Facebook’s crypto-currency controversy, as well as Britain’s new Prime Minister Boris Johnson, significant market movements can be expected, and excellent trading opportunities could arise.
Traders using a broker like UFX could therefore take advantage of price fluctuations thanks to the wide range of advanced and professional charting and trading tools available to them.
Brexit and the GBP/USD
With Boris Johnson confirmed as the new British Prime Minister, everyone is wondering what kind of leader he will be. As he enters No. 10 Downing Street, the 55-year-old Brexiteer seems to have two opposing personalities, at least according to its European neighbors. Which one will drive Brexit talks?
Since May, the GBP/USD currency pair has been losing ground as UFX charts showed. However, many experts believe that the British pound will not fall much further, as sterling seems to have already integrated political, financial and economic uncertainty surrounding Brexit into its price.
Even major international companies’ CEOs are confident about the Brexit outcome, and are anticipating increases in their investments in the UK as soon as Brexit happens, according to a recent survey conducted by KPMG.
China-US trade tensions and the American indices
While Brexit uncertainty is weighing on investment, employment and consumption in Europe, affecting international trade as a whole, U.S. protectionist measures seem to be hurting emerging economics the most.
“In China, the negative effects of escalating tariffs and weakening external demand have added pressure to an economy already in the midst of a structural slowdown and needed regulatory strengthening to rein in high dependence on debt,” declared the International Monetary Fund (IMF).
The IMF has recently upgraded its forecast for US growth from 2.3% to 2.6%, while downgrading its prediction for Chinese growth from 6.3% to 6.2%. The Washington-based institution declared that President Trump’s measures seem to be hurting China more than the USA, which could push American indices higher. However, traders should be cautious, as “downside risks have intensified since the April 2019 IMF World Economic Outlook projections”.
Lagarde’s ECB presidency and Bitcoin
The former head of the IMF, Christine Lagarde, has been chosen as the next President of the European Central Bank (ECB), and many analysts think this might be good news for cryptocurrencies, as the ECB could adopt legislation more favorable to Bitcoin.
After all, Lagarde declared back in 2017: “the best response of central bankers [to the rise of the blockchain technology and cryptocurrencies] is to continue to conduct an effective monetary policy, while remaining open to new ideas and demands as economies evolve”.