Forex: 5 things we’ll remember 2017 for

The end of December is a time to sum up the results of the year. These were eventful 12 months for currency traders. Let’s recall the most important developments.

  1. 2017 was a year of optimism at financial markets. The view on global economy was positive. S&P 500 steadily rose constantly setting new record highs. Oil prices stabilized because OPEC and its allies extended supply cuts through the end of 2018. 
  2. The US dollar index fell by more than 9% in 2017. Donald Trump’s provocative comments in Twitter and investigation over the ties of his election campaign with Russia hurt the greenback. As a result, even the Federal Reserve’s rate hikes and slow progress of the tax reform caused only temporary improvements. Traders should surely take into account Trump’s policy next year as well.
  3. The euro was the biggest gainer versus the USD – it strengthened by more than 12%. The euro zone’s economy is like a steaming train, many economic indicators rose to multiyear highs. Euro sceptics failed to win French election. Even the fact that the European Central Bank extended its asset purchases until September 2018 didn’t turn the market negative on the euro.
  4. Britain spent the year negotiating Brexit conditions. By the end of 2017, the talks finally moved to the second stage, so the UK and the European Union will start discussing their future trade relations. The pound did well and gained about 8% against the USD as British economic news were good enough and inflation was above target making the Bank of England raise rates.
  5. Bitcoin surged to 20K. We can truly call it an asset of the year. The cryptocurrency boldly defied critics who called it a bubble. Even China’s ban didn’t stop it for long. The world’s largest commodity exchanges launched trading in Bitcoin futures and this added credibility to the asset making it even more popular.

So, what have we learned in 2017? We’ve learned that trends can last rather long and a confirmation of a reversal is needed before we start trading it. That increases in interest rates doesn’t necessarily mean strengthening of a currency. That cryptocurrencies represent a new asset class that doesn’t always behave like traditional assets.

Let this knowledge stay with us in 2018! We wish you a Merry Christmas and Happy New Year! Trade wisely and be successful!

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