A volatile and wild 2016 is coming to an end and at FXStreet we are already looking forward to what 2017 may bring to the markets, which doesn't seem to be less interesting from a trading point of view. To get a glance on the upcoming trends and developments for the markets, we have asked our best contributors ten questions to help us understand what may be ahead. Here are the views from Lukman Otunuga, Research Analyst at ForexTime:
1. What will 2016 be remembered for?
2016 may be remembered as a year where repeatedly unanticipated market-shaking events created explosive levels of volatility across the financial markets. The gloom and doom in February when global stocks entered an official bear market only felt like yesterday while tremors from the Brexit shocker have made Sterling a seller’s dream. With the miraculous OPEC and Non-OPEC deal to cut production catching most by surprise, investors may enter the New Year expecting the unexpected. The real highlight of 2016 was Donald Trump’s expectation-defying presidential election win which unexpectedly sent the Dollar to 14-year highs!
2. Which were your most important achievements this year?
An amazing achievement for me this year was when FXTM was awarded the best sell-side analysis contributor award for 2016. It was very fulfilling to see that the market reports produced by the FXTM analyst team that I am a part of were popular among traders!
3. What emerging trends or issues should traders prepare for in 2017?
As 2016 slowly comes to an end, investors are already rubbing their hands together and strategizing on the next big themes for 2017. With the ongoing Brexit woes intensifying by the day, Sterling vulnerability could be a dominant theme in 2017. The rising prospects of further US rates in the New Year may ensure King Dollar maintains the throne while heightened political risks in Europe could keep the Euro depressed. A resurgent Dollar may enforce further pressures on Emerging Markets and commodities which could attract sellers in 2017.
4. Which will be the best and worst performing currencies in 2017 and why?
Sterling received a brutal pummeling in 2016 and could be instore for further punishment in 2017 if the intensifying Brexit uncertainty haunts investor attraction towards the currency. The Pound is already on track to being the second worst performer and with uncertainty remaining the name of the game when dealing with Sterling, further declines could be expected.
The rising expectations of more US rate increases and optimism over fiscal stimulus measures boosting US growth should propel the Greenback higher in 2017.
5. Which under-the-radar currency pair do you expect to make a big move in 2017?
The sensitivity over OPEC and Non-OPEC members cutting production in the New Year could create some volatility on the USDRUB. Although Russia has agreed to cut production by 300,000 barrels per day, concerns over non-OPEC respecting their pledge could weaken oil consequently exposing the Russian Rouble to losses. Technical traders may observe how the USDRUB reacts to the psychological 60.00 support which if breached could spark a market-shaking selloff.
6. Which macroeconomic events will have the biggest impact on the FX markets in 2017?
2017 may be all about the Federal Reserve and if they will raise US interest rates three times as promised at their December policy meeting. Markets were placed on a roller coaster ride this year amid the fluctuating rate hike expectations and this could become another theme in 2017. The events happening in Europe and the heavily discussed EURUSD parity dream may have a big impact on the FX markets. With uncertainty becoming friends with the Euro amid the political instability, much attention may be directed to how the ECB creates stability in 2017.
7. Which asset class will cause the next financial crisis?
This is hard to say. Assets that have caused crises have attacked silently, swiftly and under the radar. I will be paying extra attention to how a rising Dollar pressures Emerging markets and commodities in the New Year. Uncertainty from the Brexit and Europe could trigger a horrible chain reaction which dents risk appetite and pressures Global stocks.
8. What will you be focused on next year?
I will be focusing on everything in the New Year! Such as Dollar’s resurgence, events in Europe, Asia, and the ongoing Brexit developments. The historical and expectation-defying events of 2016 could make 2017 a year to remember. Will the parity dream on the EURUSD, GBPUSD and EURGBP become a reality? 2017 may provide us the answer.
9. Who are the people to watch in 2017 in terms of impact on the industry?
The industry should watch out for FXTM’s team in 2017!! It’s been an amazing 2016 and we can’t wait to charge into 2017 sharing our knowledge and insights on the FX and global markets!
10. What are your New Year's resolutions?
My new year’s resolution will be to get back to the gym! Exercising and keeping active clears the mind and can aid when dissecting the markets. I have also become an ardent fan of fantasy books this year with my goal by the end of 2017 to write a short fantasy book with me as the main character.
Disclaimer:This written/visual material is comprised of personal opinions and ideas. The content should not be construed as containing any type of investment advice and/or a solicitation for any transactions. It does not imply an obligation to purchase investment services, nor does it guarantee or predict future performance. FXTM, its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data made available and assume no liability for any loss arising from any investment based on the same.
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