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Long Term Forex Forecasts It's important to look at the big picture no matter what markets, and what time frame you are trading. There's no difference in trading Forex. Sometimes, one may wonder why a short term trend halts and reverses at a certain level before knowing that it's an important long term support/resistance, or a projection level in play. On the other hand, forex traders are always advised to pay attention to fundamentals like inflation forecasts, growth and monetary policy in medium to longer terms.
This sections provides long term forecasts reports written by selected external contributors around the world. A wide range of topics will be covered, including global economy and monetary policies. In addition, some reports also contains long term technical analysis of specific forex pairs. The long term forecasts reports are usually "longer" in length comparing to dailies and weeklies. But they definitely worth the read!
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Long Term Forecasts Reports RSS |
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Long Term Forecasts |
Written by Danske Bank |
Mar 15 10 14:58 GMT |
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Low rates are here to stay - at least in the G4. It is becoming increasingly clear that central banks in Europe, the US, the UK and Japan are in no hurry to normalise monetary conditions. Fiscal tightening, needed to curb the soaring budget deficits, simply crowds out monetary tightening. For most currency pairs, relative rates as the dominant driver for can therefore be delayed for longer than previously projected. And equity prices - a proxy for risky behaviour, fuelled by lower rates - and commodity prices can thereby remain significant for future exchange rate movements. |
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Long Term Forecasts |
Written by TD Bank Financial Group |
Mar 12 10 15:16 GMT |
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Timed from the trough in equity markets, we are now one year out from the start of the recovery. The context of the story has gyrated from bailouts of banks to governments, but the overall story remains the ebb and flow of risk appetite. There is a feeling from the market that risk is being put back on as a sluggish start for tightening from the major central banks is now the status quo and Greek debt concerns are no longer a driver. Our focus this spring remains on signs that the handoff from official support of the economy to the private sector - which is taking place right now - goes off smoothly. The near-term signs are positive for the market and our worries on the fiscal front remain centred on the implications for years down the road. |
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Long Term Forecasts |
Written by Danske Bank |
Mar 12 10 15:09 GMT |
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Euroland growth was surprisingly weak in Q4 2009 with GDP growing a mere 0.1% q/q. France saw highest growth (0.6% q/q) among the larger euro area members, while Germany saw a flat GDP. Spain remained in recession (-0.1% q/q), while Italy slipped back into recession (-0.2% q/q) after a more impressive Q3 reading of 0.6% q/q. |
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Long Term Forecasts |
Written by Wachovia Corporation |
Mar 11 10 11:20 GMT |
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Recent economic reports have cast doubts about the strength and durability of the recovery. Many concerns center on disappointing reports from the nation’s beleaguered housing sector, which has seen home sales tumble following a spurt fueled by the tax incentives. Sales of new and existing homes have fallen sharply in recent months, and pending home sales data suggest sales weakened further in February. |
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Long Term Forecasts |
Written by Lloyds TSB |
Mar 11 10 11:14 GMT |
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As widely predicted, financial markets have been volatile as the end of the period of extraordinary monetary and fiscal loosening draws nearer. Economic growth is picking up and becoming more entrenched in most countries. As a result of this, some central banks, like Australia and Norway, have raised rates a number of times. China and India are getting closer to increasing key benchmark policy interest rates. Expectations that the US Fed will be the first of the major developed economies to raise interest rates, as their economy recovers fastest, has meant that the dollar is strengthening. We expect this to be a major theme of the year ahead. |
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Long Term Forecasts |
Written by Danske Bank |
Mar 11 10 10:48 GMT |
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The economic recovery is on track with ongoing, but gradual, signs of progress among consumers and businesses, but with some more erratic developments in housing. In Q4 09, the economy delivered its second positive quarter on growth following the recession, with GDP expanding at 5.9% q/q AR. Indeed this turned out to be even stronger than we had forecast in December's Global Scenarios, the main reason being a faster-than-anticipated stabilisation of inventories. |
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Long Term Forecasts |
Written by Danske Bank |
Feb 16 10 10:37 GMT |
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Greek debt concerns intensified during the past month, leaving the euro with a heightened risk premium. While an unsustainable Greek fiscal policy should not be a major concern for the eurozone as a whole (Greece only constitutes some 2-3% of total eurozone GDP) the situation has escalated to a point where it has become at least partly systemic. Market focus has turned to the other PIIGS countries (Portugal, Ireland, Italy, Greece and Spain), which since New Year have seen government bond spreads widen alongside already elevated Greek spreads (see chart). The result has been a broad-based euro sell-off leaving the single currency with a risk premium in excess of 4% (as estimated by our short-term financial model). This is more than we factored into our January forecasts. |
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Long Term Forecasts |
Written by Westpac Institutional Bank |
Feb 05 10 15:22 GMT |
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In mid December, the Australian dollar was sitting at around 90.5˘. Since that time the AUD has moved in a 93˘ to 86˘ range. We are now sitting at the extreme lowpoint of that area after a run of negative sentiment accumulated in the early part of February. Indeed, the AUD is at its lowest ebb in some time. Our core thinking had been that the currency would have a final surge to 96˘ early in the year before |
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Long Term Forecasts |
Written by Wachovia Corporation |
Jan 13 10 14:42 GMT |
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Our estimate for fourth quarter real GDP has been raised significantly as a result of October and November's stronger inventory numbers. We are still expecting a $20 billion drop in inventories, so there is some upside risk. The slower pace of inventory liquidations is expected to add around 4 percentage points to real GDP growth during the fourth quarter, which should send the headline GDP number up at a 5.6 percent pace. |
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Long Term Forecasts |
Written by Lloyds TSB |
Jan 13 10 14:36 GMT |
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World economic recovery is underway, led by the emerging markets. When the data for Q4 2009 are in, they will show that all of the G20 economies - which together account for over 90% of world gdp - are expanding. This recovery has three main implications for financial markets in 2010. The first is that ultra loose monetary and fiscal policies put in place to kick-start recovery will start to be reversed. Second, this will likely lead to renewed volatility. Third, it is likely to change the dynamics of interest rate and FX markets in the months ahead. |
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Long Term Forecasts |
Written by RBC Financial Group |
Jan 10 10 08:22 GMT |
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Data over the past month largely produced upside surprises relative to market forecasts resulting in a sustained pickup in equity markets and a relatively sharp rise in government bond yields. Since our last publication on December 4, 2009, 10-year rates in the markets that we cover were up as much as 16-38 basis points. Yields retraced some ground in the first week of January but remain in the upper end of their 2009 trading range. The world equity market index posted a 2.1% gain during the month, managing to build on the very strong increases in the prior five-month period. |
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Long Term Forecasts |
Written by Easy Forex |
Dec 29 09 03:05 GMT |
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For most of 2009 the USD traded weaker pressured by low yields and improving risk appetite. USD in ending the year near a three and half month high supported by a shift in focus to improving US economic outlook and Fed rate hike speculation. We expect the USD to rally in early 2010 as the trade shifts focus to interest rate differentials and the correlation to risk appetite continues to breakdown. The key focus will be the Feds withdrawal of stimulus and timing of Fed rate hikes. The US labor market outlook is key to Fed policy. The Fed has indicated that rate hikes are unlikely until job is growth returns. |
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Long Term Forecasts |
Written by TD Bank Financial Group |
Dec 27 09 16:18 GMT |
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Herein we provide a quick summation of our top trades for 2010. Each trade is discussed more fully in the geographic and product-specific sections of this report. 1) Long CAD / Short EUR (Page 10) CAD should outperform EUR due to rising commodity prices and Canada's stronger structural position. |
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Long Term Forecasts |
Written by Wachovia Corporation |
Dec 27 09 16:13 GMT |
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Trading was fundamentally transformed by the European Age of Discovery, which was pioneered by Portuguese navigators, such as Bartolomeu Dias and Vasco da Gama, who set sail down the West African coast, eventually making it to India by the end of the 16th century. The new course broke the stranglehold that the Ottoman Turks had on the overland spice trade and the considerable wealth that it provided. Ferdinand Magellan and Juan Elcano further altered world navigation by 1522 when their expedition circumnavigated the globe. In the 21st century, financial trading has been permanently altered by the global crisis associated with subprime mortgages, structured products and credit default swaps. Yet, there still exists an imperative need to finance economic activity. |
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Long Term Forecasts |
Written by Danske Bank |
Dec 27 09 16:08 GMT |
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Risky assets generally thrive when growth is in the early - and normally fastest - stages of recovery. As this year's brisk recovery has happened alongside massive cost-cutting earnings have been in a ‘sweet spot'. However, much of the fuel driving the recovery is of a temporary nature. The most important factor here is the inventory cycle but fiscal stimulus and the boost to demand from Asian recovery will also fade in 2010. Although we believe other engines will take over and make the recovery sustainable (theme #2) growth is likely to peak at some point. |
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Long Term Forecasts |
Written by TheLFB-Forex.com |
Nov 15 09 10:56 GMT |
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The labor market has been one of the hardest hits sectors of the real economy during the credit crisis, with the same trend being seen in most of the developed economies. The history of labor reporting indicates that employment is a lagging indicator of economic health, where the slack in an economy has to be absorbed before growth then leads to hiring. With that accepted, there is still a lot of pain in the labor market that is not being tempered by economic expansion signals. |
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Long Term Forecasts |
Written by Wachovia Corporation |
Nov 12 09 18:46 GMT |
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So it indeed has been. As this short quote from the Executive Summary of our 2009 Annual Outlook (published in December 2008) neatly summarized, the economic recovery faces a number of secular challenges that will alter the pace and composition of growth. For many decision-makers, the outlook for 2010 suggests continued change and adjustment to an altered reality of more government/less private sector contributions to growth, greater caution/less leverage for consumer spending, greater prudence/less speculation in lending and the importance of exports in moving the U.S. economy. |
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Long Term Forecasts |
Written by RBC Financial Group |
Nov 09 09 12:47 GMT |
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The tide has turned for the global economy with U.S. real GDP posting a stronger-than-expected increase in the third quarter, the Reserve Bank of Australia (RBA) citing Australia’s good economic performance as a reason for raising the policy rate and China recording a breathtaking 8.9% increase in third-quarter output. Canada, the United Kingdom and the Eurozone have yet to produce clear indications that their economies are out of recession, but conditions are improving and we expect reports of positive growth soon. Central banks are cautious, however, with only the RBA of the major central banks we cover starting to unwind monetary policy stimulus. Given the deep hole in economic activity, it is likely to be a long time before other banks will be in a position to follow the RBA’s lead, with hikes expected to come in the latter part of 2010 and continuing in 2011. |
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Long Term Forecasts |
Written by Lloyds TSB |
Nov 09 09 12:42 GMT |
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Foreign exchange rate volatility remained fairly intense last month. Interest rates were calmer but here too tensions have increased, as financial markets give more thought to when some of the extraordinary loosening of monetary policy seen over the last year will start to be reversed. On the foreign currency front, increased signs of economic recovery are generally keeping the US dollar under selling pressure. Some countries have already started to raise interest rates, like Norway and Australia (the latter twice in as many central bank meetings). More countries will follow in the months ahead. On the basis of our forecast that global economic recovery is being led by the emerging market countries, we look for a number of these to hike rates in early 2010. Looking at gdp figures so far for Q3, which showed doubledigit annualised increases in Singapore, South Korea and China, we would not be amazed if these countries were amongst the first tranche that either raise rates or signal an increase. |
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Long Term Forecasts |
Written by Wachovia Corporation |
Oct 20 09 15:31 GMT |
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Gold prices have surged in recent months, which some observers claim is a clear warning that inflation will soon turn sharply higher as it did in the late 1970s. However, other forward-looking market-based inflation indicators do not support this hypothesis. Inflation indicators such as bond yields, consumer expectations and TIPS spreads have been running at fairly depressed levels, which suggest inflation will likely remain benign.1 If the spike in gold prices is not a sign of looming inflation, why are gold prices at a record high? |
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Latest Long Term Forecasts |
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