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Poll: Forex Traders Expectations for 2013

December 17, 2012 by

Generally, people prefer to expect an upcoming year to be at least slightly better than the current year. But “better” is a different kind of beast for the Forex traders. If you are a short-term investor and benefit from market volatility, you would want less stability in 2013. If you are a long-term currency trader, you would probably want some important shifts in international foreign exchange policies to engage in new positions.

Some of the biggest questions of the next year will be whether the eurozone would continue struggling for its integrity, whether new fiscally troubled countries would require considerable bail-outs and whether any country would leave the monetary union. At the same time, other traders would be more worried with the “fiscal cliff” situation in US, which may trigger as early as January 1.

Swiss National Bank is also in the focus of many FX traders as the institution may either raise the current EUR/CHF floor from the current 1.2 level to some higher rate or abandon the floor completely. Both decisions would mean a lot for all the CHF-based currency pairs as well as to many euro- and yen-related ones. Though it is not very probable, some central banks may decide to follow SNB’s trend and peg their currency to another one. This would lead to unexpected and potentially profitable consequences in the foreign exchange market.

Other major central banks may surprise the trading community by initiating interest rate increases. It is currently a kind of consensus that the rates will remain unchanged (or occasionally lowered in some developed countries) at least until 2014. Another potentially interesting regulatory decision could come out of China, which could rule out a less restrictive policy for its renminbi (yuan) exchange rate.

While not all conditions are currently favorable for carry trade, its full-scale re-emergence could well be one of the most influential events of the future year. Catching the right moment here could mean nice profits to many risk-hungry traders. On the not so bright note, 2013 could also become a year of a new Forex tax. Governments of several countries have already voiced an opinion that such tax would be a good idea. Definitely not for traders. Of course, there is little chance for such a tax or fee to work in real life at all, yet it might become of the unpleasant surprises of the approaching year.

Some part of investors always believe that the basic commodities (like grains, food, industrial metals and energies) are undervalued. They would expect 2013 to show a significant rally in such instruments due to the rise of consumption and stagnation in output. On the other hand, there are investors betting on gold/silver appreciation. With no new record highs since 2011, it is quite natural to expect something interesting from these precious metals in 2013. And, of course, there is oil, which still has not recovered from its 2008 fall. Five years could be enough time for a rest before a new rally.

Unfortunately, not all events that significantly move the currency rates are positive. In fact, they rarely are. A major financial crisis could hit the market again in 2013. While some developed countries are still experiencing recession caused by the crisis of 2008, some powerful economic and financial turmoil could cause a real panic in Forex. Nature may also affect the markets. Another Katrina or Indian tsunami (similar to one in 2004) could lay waste to one currency and spur up others. Then, there is always a danger of some major terrorist attack, which is rarely ignored by the financial world. A full-scale war would have even more profound and long-term effect on the markets. If the current situation in the Middle East escalates to an international armed conflict level, the foreign exchange market would react with a lot of violence of its own.

Do you believe anything of such extent may happen in 2013?

What do you expect from 2013?

  • More eurozone troubles (18%, 8 Votes)
  • Rally in gold (11%, 5 Votes)
  • Some significant but completely unpredicted event (9%, 4 Votes)
  • United States falling off the "fiscal cliff" (7%, 3 Votes)
  • SNB removing floor for EUR/CHF (7%, 3 Votes)
  • Rally in oil (7%, 3 Votes)
  • Full-scale re-emergence of JPY-based carry trade (7%, 3 Votes)
  • Major terrorist attack (2001 style) (5%, 2 Votes)
  • Major financial crisis (2008 style) (5%, 2 Votes)
  • Full-scale war in Middle East (5%, 2 Votes)
  • Significant international tax imposed on all Forex transactions (5%, 2 Votes)
  • New currency pegs introduced (5%, 2 Votes)
  • Breakup of the eurozone (5%, 2 Votes)
  • Rally in basic commodities (2%, 1 Votes)
  • China free-floating renminbi (2%, 1 Votes)
  • Surprise interest rate increases in developed economies (2%, 1 Votes)
  • Natural disaster of global scale (2004 tsunami style) (0%, 0 Votes)
  • SNB raising floor for EUR/CHF (0%, 0 Votes)
  • Other (Please specify in comments.) (0%, 0 Votes)

Total Voters: 15

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If you would like to share some detail about your expectations and forecasts for the year 2013, please feel free to do so using the form below.

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