Recent Events Set to Impact the Forex Market in 2021
- 2020 became one of the most volatile years for all markets. Now many market-moving events are already expected for 2021.
The Foreign Exchange or Forex Market is the largest and most active financial market in the world. Participants from all over the globe take part in trillions worth of foreign exchange transactions daily. It comes as no surprise then that due to the global and interconnectedness of the forex marketplace, events from all corners of the world can have immediate consequences on exchange rates and currency values.
Below are just some of the events that have transpired this year that are set to have consequences in 2021.
US Presidential Election
The severity of political events on global markets can range from subtle, to substantial to even catastrophic. Dubbed by political pundits as 'the most important election of our time', the 2020 US presidential election saw Joe Biden’s victory over current President Donald Trump. Both candidates differed greatly in their approaches to topics such as social welfare, homeland security, economic growth and the ongoing coronavirus pandemic. Thus, this ideological shift has the potential to evoke greater volatility in the country’s currency. Biden’s commitment toward 'net-zero carbon emissions by 2050', for example, will not only impact the US Fracking and Fossil Fuels industry but will most likely affect several markets. New environmental conscious reforms introduced by Biden will certainly for at least a short period of time reduce economic growth.
New COVID-19 Strain and Looming Brexit Brexit Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum. In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades.The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019. Active Prime Minister Boris Johnson was elected Prime Minister the following month, who was well-known as a headstrong Brexit supporter. While the United Kingdom was predicted to leave exit the EU by October 31st, 2019, the U.K. Parliament sought out a deadline extension that delayed voting on the new deal. Following Boris Johnson’s reelection, Brexit occurred on January 31st, 2020 at 11 pm Greenwich Mean Time. Brexit Creating Ongoing Issues in with EuropeWhile the United Kingdom is in a transition period following its departure from the EU, the U.K. is negotiating its complete trade relationship with the EU, which is the United Kingdom’s largest trade partner. Terms of this trade agreement must be met by January 1st, 2021.Should terms of this trade agreement take longer than the projected resolution date of January 1st, 2021 then the U.K. must acquire an extension no later than June 1st, 2020. Failure to do so will result in the U.K. is subject to tariff and host rule changes exercised by the E.U. This situation is referred to as the “no-deal” Brexit and should this occur the consequences could result in a significant fallout of the U.K. economy. For the past few years, many banks and lenders operating previously in the UK had been given passporting rights to the European continent. The lingering uncertainty caused by Brexit resulted in many of these lenders relocating their European headquarters within continental Europe. Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum. In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades.The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019. Active Prime Minister Boris Johnson was elected Prime Minister the following month, who was well-known as a headstrong Brexit supporter. While the United Kingdom was predicted to leave exit the EU by October 31st, 2019, the U.K. Parliament sought out a deadline extension that delayed voting on the new deal. Following Boris Johnson’s reelection, Brexit occurred on January 31st, 2020 at 11 pm Greenwich Mean Time. Brexit Creating Ongoing Issues in with EuropeWhile the United Kingdom is in a transition period following its departure from the EU, the U.K. is negotiating its complete trade relationship with the EU, which is the United Kingdom’s largest trade partner. Terms of this trade agreement must be met by January 1st, 2021.Should terms of this trade agreement take longer than the projected resolution date of January 1st, 2021 then the U.K. must acquire an extension no later than June 1st, 2020. Failure to do so will result in the U.K. is subject to tariff and host rule changes exercised by the E.U. This situation is referred to as the “no-deal” Brexit and should this occur the consequences could result in a significant fallout of the U.K. economy. For the past few years, many banks and lenders operating previously in the UK had been given passporting rights to the European continent. The lingering uncertainty caused by Brexit resulted in many of these lenders relocating their European headquarters within continental Europe. Read this Term Deals in the UK
The British pound took a major hit on Monday as the U.K discovered a new 70% more infectious coronavirus strain, leading other nations to temporarily restrict travel to and from the U.K. This new strain poses a major risk for the fragile rebound of the European economy. It also still remains to be seen whether vaccines will be effective against this new strain. Additionally, the uncertainty surrounding Brexit trade talks has caused currencies to fluctuate as Britain and the European Union remain in a deadlock, while the December 31st deadline looms. Despite the challenges the currency stands to face, analysts still remain bullish on the pound heading into 2021 as the widespread distribution of a vaccine and an agreement on a Brexit deal can lend their support to the GBP.
US Second Stimulus Package
U.S. Republicans and Democrats reached an agreement for the second-largest relief bill in American history at 900 billion, following the $2 trillion Cares Act that Congress approved in March. Eligible individuals stand to receive direct stimuli Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times. One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times. Read this Term of $600, half the amount provided in the first stimulus round. Some families will also receive an additional $600 per child. Moreover, the Paycheck Protection Program will reopen, targeting some of the hardest-hit small businesses who can apply for a second loan.
A large majority of US leaders view the new bill as a vital step to a larger relief package in 2021, which may provide a third round of stimulus cheques among other provisions. Although the new stimulus package is set to provide real support for the economy, its announcement failed to serve as a major bullish catalyst for stocks. This could be due to the new coronavirus strain dominating headlines shifting traders’ attention. Thus, its positive impacts remain to be seen within the coming weeks.
The new year is anticipated to witness the distribution of a COVID-19 vaccine and Joe Biden’s new presidential administration with a split Congress, the ongoing effects of which are yet to be seen. With many analysts predicting more volatility in the months to come, traders must ensure they stay up to date with all current affairs as we continue to navigate the uncertain waters brought about by the ongoing pandemic.
Enjoy super-tight spreads and up to 1:500 leverage on all 150 tradable assets including 55 Currency pairs with LongHornFX. Sign up here.
Disclaimer: The content of this article is sponsored and does not represent the opinions of Finance Magnates.
The Foreign Exchange or Forex Market is the largest and most active financial market in the world. Participants from all over the globe take part in trillions worth of foreign exchange transactions daily. It comes as no surprise then that due to the global and interconnectedness of the forex marketplace, events from all corners of the world can have immediate consequences on exchange rates and currency values.
Below are just some of the events that have transpired this year that are set to have consequences in 2021.
US Presidential Election
The severity of political events on global markets can range from subtle, to substantial to even catastrophic. Dubbed by political pundits as 'the most important election of our time', the 2020 US presidential election saw Joe Biden’s victory over current President Donald Trump. Both candidates differed greatly in their approaches to topics such as social welfare, homeland security, economic growth and the ongoing coronavirus pandemic. Thus, this ideological shift has the potential to evoke greater volatility in the country’s currency. Biden’s commitment toward 'net-zero carbon emissions by 2050', for example, will not only impact the US Fracking and Fossil Fuels industry but will most likely affect several markets. New environmental conscious reforms introduced by Biden will certainly for at least a short period of time reduce economic growth.
New COVID-19 Strain and Looming Brexit Brexit Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum. In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades.The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019. Active Prime Minister Boris Johnson was elected Prime Minister the following month, who was well-known as a headstrong Brexit supporter. While the United Kingdom was predicted to leave exit the EU by October 31st, 2019, the U.K. Parliament sought out a deadline extension that delayed voting on the new deal. Following Boris Johnson’s reelection, Brexit occurred on January 31st, 2020 at 11 pm Greenwich Mean Time. Brexit Creating Ongoing Issues in with EuropeWhile the United Kingdom is in a transition period following its departure from the EU, the U.K. is negotiating its complete trade relationship with the EU, which is the United Kingdom’s largest trade partner. Terms of this trade agreement must be met by January 1st, 2021.Should terms of this trade agreement take longer than the projected resolution date of January 1st, 2021 then the U.K. must acquire an extension no later than June 1st, 2020. Failure to do so will result in the U.K. is subject to tariff and host rule changes exercised by the E.U. This situation is referred to as the “no-deal” Brexit and should this occur the consequences could result in a significant fallout of the U.K. economy. For the past few years, many banks and lenders operating previously in the UK had been given passporting rights to the European continent. The lingering uncertainty caused by Brexit resulted in many of these lenders relocating their European headquarters within continental Europe. Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum. In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades.The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019. Active Prime Minister Boris Johnson was elected Prime Minister the following month, who was well-known as a headstrong Brexit supporter. While the United Kingdom was predicted to leave exit the EU by October 31st, 2019, the U.K. Parliament sought out a deadline extension that delayed voting on the new deal. Following Boris Johnson’s reelection, Brexit occurred on January 31st, 2020 at 11 pm Greenwich Mean Time. Brexit Creating Ongoing Issues in with EuropeWhile the United Kingdom is in a transition period following its departure from the EU, the U.K. is negotiating its complete trade relationship with the EU, which is the United Kingdom’s largest trade partner. Terms of this trade agreement must be met by January 1st, 2021.Should terms of this trade agreement take longer than the projected resolution date of January 1st, 2021 then the U.K. must acquire an extension no later than June 1st, 2020. Failure to do so will result in the U.K. is subject to tariff and host rule changes exercised by the E.U. This situation is referred to as the “no-deal” Brexit and should this occur the consequences could result in a significant fallout of the U.K. economy. For the past few years, many banks and lenders operating previously in the UK had been given passporting rights to the European continent. The lingering uncertainty caused by Brexit resulted in many of these lenders relocating their European headquarters within continental Europe. Read this Term Deals in the UK
The British pound took a major hit on Monday as the U.K discovered a new 70% more infectious coronavirus strain, leading other nations to temporarily restrict travel to and from the U.K. This new strain poses a major risk for the fragile rebound of the European economy. It also still remains to be seen whether vaccines will be effective against this new strain. Additionally, the uncertainty surrounding Brexit trade talks has caused currencies to fluctuate as Britain and the European Union remain in a deadlock, while the December 31st deadline looms. Despite the challenges the currency stands to face, analysts still remain bullish on the pound heading into 2021 as the widespread distribution of a vaccine and an agreement on a Brexit deal can lend their support to the GBP.
US Second Stimulus Package
U.S. Republicans and Democrats reached an agreement for the second-largest relief bill in American history at 900 billion, following the $2 trillion Cares Act that Congress approved in March. Eligible individuals stand to receive direct stimuli Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times. One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times. Read this Term of $600, half the amount provided in the first stimulus round. Some families will also receive an additional $600 per child. Moreover, the Paycheck Protection Program will reopen, targeting some of the hardest-hit small businesses who can apply for a second loan.
A large majority of US leaders view the new bill as a vital step to a larger relief package in 2021, which may provide a third round of stimulus cheques among other provisions. Although the new stimulus package is set to provide real support for the economy, its announcement failed to serve as a major bullish catalyst for stocks. This could be due to the new coronavirus strain dominating headlines shifting traders’ attention. Thus, its positive impacts remain to be seen within the coming weeks.
The new year is anticipated to witness the distribution of a COVID-19 vaccine and Joe Biden’s new presidential administration with a split Congress, the ongoing effects of which are yet to be seen. With many analysts predicting more volatility in the months to come, traders must ensure they stay up to date with all current affairs as we continue to navigate the uncertain waters brought about by the ongoing pandemic.
Enjoy super-tight spreads and up to 1:500 leverage on all 150 tradable assets including 55 Currency pairs with LongHornFX. Sign up here.
Disclaimer: The content of this article is sponsored and does not represent the opinions of Finance Magnates.