Currency Markets Outlook

Currency Markets Outlook - Articles & White Papers

The Savvy Investor Currency Markets outlook section contains articles and white paper institutional research from the leading global research providers and asset managers in the foreign exchange marketplace.

The currency or foreign exchange (FX) market has a daily transaction value exceeding $5 trillion and is arguably the most traded and most liquid asset in the investment universe.  Unlike most other markets, the FX market is decentralised i.e. there is no conventional single exchange location where all transactions are conducted.  Instead, market participants transact business electronically via banks and other specialist currency providers.

FX transactions are generally made for settlement by ‘spot’, which is the transfer of currency between banks usually within 2 business days.  The FX market is open from Monday morning in the Asia Pacific region time zone until Friday evening in New York.  The only trading breaks are weekends and well observed public holidays such as Christmas Day and New Years’ Day.  Effectively, the market is open 24/5 throughout the business week. 

Participants conducting large scale business in the FX marketplace will range from global central banks who may be amending the holdings of foreign currency reserves on their own central bank ledgers, to companies who may be converting from domestic to foreign currency for overseas asset purchases, or for hedging overall corporate FX risk.

Variables that can influence the relative value of one currency versus another are numerous but will predominantly be related to perceived or actual changes in interest rate and inflation expectations.  In recent years, central banks’ intervention and influence in currency markets has increased markedly; examples of which have been quantitative easing/tightening (Federal Reserve), currency peg abandonment (Swiss National Bank) or currency devaluation (People’s Bank of China).  All these events have been catalysts for major market volatility and thus, it can be argued that keeping abreast with currency market forecasts is of paramount importance to fund managers, asset allocators and currency traders alike. 

Since developments in the currency market are changing regularly, the material that Savvy Investor shares with our readers will usually be periodic and with a more intermediate term global macro focus.  Subjects covered will include: currency hedging, factor investing in FX, currency trends and forecasts for developed and emerging markets, interest rate differentials and the carry trade phenomenon, protectionism, tariffs, and currency weaponisation. The implications of the USD as the world reserve currency, the future of the Euro, global central bank policies and the legacy of QE will also be themes addressed directly or indirectly by our publishers.

As well as featuring in-depth white paper pdf, article and blog written material containing fundamental and technical currency market analysis, Savvy Investor will also link to video and podcast FX market content from the leading authors in this field.

The following publications featuring FX market summaries, comment and analysis are widely read by Savvy Investor members: