Upcoming Changes in Exchange Rates are Influencing Forex Trading
It is important for everyone to make sure they are taking steps to diversify their investments. One of the most popular sources of diversification comes in the form of forex trading. For those who don’t know, this is the process of converting currencies, seeking to take advantage of the changes in currency valuations over time. With the growth of CFD trading platforms online, this is only going to become more popular. Like stocks and bonds, there are trends in the world of forex trading that people should note.
First, one of the most commonly overlooked locations of economic growth is Australia. Australia is one of the few places on Earth with a significant amount of underdeveloped land. Furthermore, Australia also has one of the highest population growth rates, both in terms of birth rate and immigration. Combine this with some of the major cities in Australia such as Melbourne, Sydney, Brisbane, and Perth, and it is easy to see why the Australian economy is ripe for growth. As a result, many experts believe that the Australian dollar is undervalued right now. Expect the Australian dollar to grow quickly in 2020 and beyond.
On the other hand, the Chinese economy is tumbling quickly. The rate of growth of the Chinese economy has been slipping now for some time; however, that rate has ground to a halt over the past few months. It appeared like the Chinese economy was going to get a boost as the US and Chinese governments appeared to see a path out of their trade war; however, this hope has been replaced by the growth of the coronavirus worries. This has taken the world by storm and all started in the Chinese city of Wuhan. As a result, people are very hesitant to invest in the Chinese economy right now.
Finally, the Japanese economy appears to see some worries as well. While the Japanese economy used to be one of the major hubs in the Pacific, the Japanese economy reported underwhelming numbers in the most recent quarter. As a result, the already weak Yen has started to slip that much more. While the Japanese are sure to right their economy at some point in the future, that doesn’t appear to be happening at any point soon.
These are only a few of the major trends taking place in forex trading in 2020. Those who are interested in getting involved in the world of forex trading need to note some of the major shifts in the global economic landscape. This will help them make educated decisions when it comes to trading foreign currencies both in 2020 as well as beyond.