FOREX.com 2015 Outlook: Can America save the world?
- With Europe, China and the UK all slowing down, the US may need to prop up global growth singlehandedly next year.
LONDON, NEW YORK and SYDNEY, Dec. 18, 2014 /PRNewswire/ -- FOREX.com, the retail division of GAIN Capital Holdings, Inc. (NYSE: GCAP), a global provider of online trading services, today released its 2015 Market Outlook report.
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FOREX.com analysts predict that the dollar will be the star performer in the G10 next year, reflecting a stronger US economic outlook and the Fed's plan to move towards normalisation of monetary policy in the first half of 2015. With weakness in other parts of the world likely to lead to monetary policy stimulus – potentially including the Eurozone and Japan – the US could be the sole beacon of economic hope for 2015.
Kathleen Brooks, Research Director at FOREX.com said: "Although there are dangers associated with the weakness in the economies of Europe and Asia to the US, the measures taken by those other nations could actually help the US maintain its strength, especially if we see the ECB embark on QE in 2015.
"All in all, the future looks bright for the world's largest economy, and if oil prices continue to decline as they have in the latter half of 2014, the US may keep this momentum going even if the Fed starts to increase rates to a more historically normal level."
The report also looks at possible outcomes following the UK election in May. The report analyses the potential for fractious coalitions and marginal parties winning power, which could trigger market panic as investors start to worry about the UK's position in the EU and its weak economic fundamentals. This could cause a sharp fall in the pound, a rise in Gilt yields, and a decline for the FTSE 100, as markets tend to react badly to political uncertainty.
Expectations from the FOREX.com 2015 Markets Outlook include:
- The dollar is expected to reign supreme in early 2015, as the divergent monetary policy paths between the Federal Reserve and the other major central banks drive the greenback higher
- The outlook for the Euro is negative, with widening sovereign spreads resulting from a potential political crisis in Greece, coupled with QE, likely to lead to another leg lower beyond 1.20 against the dollar.
- Continued dovish talk from the Bank of England about interest rate rises, coupled with more difficult economic fundamentals, is likely to weigh on the pound next year.
- As monetary policy in the US heads towards the path of normalization, only moderate further gains in US stocks are envisaged.
- While Germany's DAX could outperform in 2015 as the country leads growth in the Eurozone, the commodity-heavy FTSE 100 may struggle again.
- The prospect of a tighter oil market means crude prices could soon stabilize, and the market will be less volatile than in 2014.
- The generally bearish market sentiment towards gold seen in 2014 is likely to continue into next year.
- Volatility is set to rise as economic data is likely to have a more direct and immediate impact on monetary policy over the next 12 months.
The full FOREX.com 2015 Markets Outlook Report is now available at www.forex.com/uk under Market Analysis.
The report, prepared by the FOREX.com research team, covers major global equity markets and commodities including gold, silver and oil markets along with the potential price ranges for key G10 FX pairs, such as EUR/USD, GBP/USD, USD/JPY, EUR/GBP and USD/CNY.
The opinions and information in this report are for general information use and are not intended as an offer or solicitation to any product offered.
Foreign Exchange and other leveraged products involve significant risk of loss and are not suitable for all investors. Increasing leverage increases risk. Before deciding to trade foreign exchange and other leveraged products, you should carefully consider your financial objectives, level of experience and risk appetite. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents.
GAIN Capital and its affiliates are regulated by the Commodity Futures Trading Commission (CFTC), the National Futures Association (NFA) and the Securities and Exchange Commission (SEC) in the US; the Financial Conduct Authority (FCA) in the UK; the Financial Services Agency (FSA) in Japan; the Securities and Futures Commission (SFC) in HK; the Investment Industry Regulatory Organization of Canada (IIROC); the Monetary Authority of Singapore (MAS); and the Australian Securities and Investments Commission (ASIC) in Australia.
About GAIN Capital
GAIN Capital Holdings, Inc. (NYSE: GCAP) is a global provider of online trading services. GAIN's innovative trading technology provides market access and highly automated trade execution services across multiple asset classes to a diverse client base of retail and institutional investors.
GAIN's businesses include FOREX.com, which provides retail traders around the world access to a variety of global OTC financial markets, including forex, precious metals and CFDs on commodities and indices; GTX, a fully independent FX ECN for hedge funds and institutions and OEC, an innovative online futures broker.
In October 2015 GAIN announced that it has entered into a definitive agreement to acquire City Index (Holdings) Limited ("City Index"), a leading online trading firm specializing in contracts for difference (CFDs), forex and UK spread betting.
GAIN Capital is headquartered in Bedminster, New Jersey, with a global presence across North America, Europe and the Asia Pacific regions. For further company information, visit www.gaincapital.com.
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