A Look at Forex in 2100 – What Are Some Economic Events Which Could Align the Forex Markets?
- November 25, 2021
- Will Turner
Forex in 2021 is a time when a lot of traders will be able to step into the Forex market. But what is also apparent is the risk factor as they are very obvious. But take heart because the risk factors associated with the Forex market are not as high as they were in the past. Still, because of the precautions taken by several countries in response to the recent spread of the CO VID-19 global pandemic, trading and investing in Forex are witnessing unprecedented demand from overseas investors. The governments are doing their best to curb this surge of demand and yet it seems that they have failed.
One of the reasons why traders will start entering the Forex market in 2150 is the possibility that Forex will trump all other currencies and be the world’s dominant currency. The US dollar is the current leader but Chinese, Indian and Japanese currencies are growing stronger and faster than ever before. If Forex performs well and becomes the leading international money exchange platform, then there is a strong probability that the US dollar will lose its grip on the top spot. If that happens, then Forex trading and investing in 2150 will be a profitable venture for those who are positioned right.
At present, China is the largest producer of the commodities which are used in the global trade, including oil, steel and agricultural produce such as soybeans. China’s economy is growing at a phenomenal pace and the country is starting to emerge as the premier global economy in the future. China’s main economic objective is to reform the country’s economy and make it more efficient so that it can rise to preeminence in the world market. It is very unlikely that the Chinese government will allow the weakening of its currency in order to allow the US dollar to regain its dominance over the cryptocorps, especially after the US administration has stated that the US dollar is the best form of currency that can be used internationally.
One likely scenario which may cause the US dollar to lose its ability to remain the undisputed number one between other cryptocorps is the outbreak of a pandemic. There is no guarantee that this pandemic will last a long time or be persistent, but it is an implausible scenario. There is a high possibility that the Forex trading marketplace will be closed during the outbreak of a pandemic because all Forex traders will suddenly close their accounts. If this occurs, then Forex in 2021 will be a very gloomy period.
If a pandemic does break out, then there is a high probability that the trading platform will experience a significant decline in its daily volume. Since most Forex traders buy large volumes of currencies on a daily basis, a decline in volume will quickly decrease the liquidity of the market. This is a bad thing for Forex because it will force most of its investors to sell all of their remaining Forex accounts at once in order to cover their losses. Since a lot of people are selling, Forex in 2021 will experience what is called a “bear market” in which the volume of trades will be low compared to normal. At this point, Forex traders will be more vulnerable to being manipulated by unscrupulous traders. Because fewer people are buying, the supply of money will be reduced and this will cause an increased volatility in Forex prices.
Other possible economic events which could cause the value of Forex to decline include the U.S. elections, the European Central Bank’s policy decision, the release of interest rates, the results of major stock market indexes, and the outcome of important international political events. There is also a risk that the value of the Swiss franc might decrease due to political factors. Even though there is no guarantee that these scenarios will occur, it is wise to have a contingency plan in place should one of them occur.