This new decade has already had a bumpy start. Coupled with the uncertainty that dragged through most of 2019, we could be looking at a volatile market in 2020. Whether it’s political, environmental or trade, these factors can play a significant part in Forex and other forms of trading.
Here are some of the biggest, and how they could affect the markets in 2020.
It’s done and dusted, right? Not even close. The full ramifications of Brexit are likely to become fully apparent over the next two years. Even though Britain has technically left the European Union, it is essentially still in a holding period until it can be all finalized and the economy to be fully untangled from that of the EU. The British economy has already seen a slowing in recent years, while the final quarter of 2019 saw a stagnation of growth. Forecasters are predicting an increased trading risk for the UK on the international markets.
The U.S Election
Though this is still a long way off, the shadow of this titanic showdown is likely to dominate 2020. Despite the obvious political differences between Democrats and Republicans, election wins typically don’t make monumental changes on the markets. There is a system in place that works well, and though it may be tweaked one way or the other, most things remain relatively stable. 2020 could prove to be the exception to this rule. An election involving both Donald Trump and Bernie Sanders would pit two drastically different visions of the United States against each other and the financial implications of either one could be enormous. A win for Trump would embolden his relaxing of financial regulations even further, while Sanders has been a long-standing advocate for a safer, more measured approach.
You need only look to Australia last month to witness the devastation that climate change is bringing. Extreme weather is becoming more and more common, and the impact on financial markets could become more significant. It’s difficult to say exactly in what way this will happen, but major incidents can come with enormous financial loss, for individuals, government and even insurers. It is likely in the future that areas prone to disaster will no longer be covered by insurance, which is likely to put an even greater strain on the global economy.
Now when is there not global uncertainty? The world is always in a state of lux and as humans we are always evolving, all be it incredibly slowly. Global uncertainty goes part and parcel with globalization. Everything is connected, but those very connections are likely to have ripple effects. The continued trade war between the U.S and China, the Coronavirus, a global economic slowdown, not to mention several wars and scenes of large scale unrest such as in Hong Kong and in South America, there are multiple events factors in play right now. A volatile world is nothing new, but it pays to keep track of the most significant events going on right now, and how they might affect the markets.