Two major happenings that affected the Forex trading market in 2016 were Brexit and the election of Donald Trump as the 45th president of the United States. Both these things led to unexpected fluctuations in the currency markets.With 2017 on the horizon, we can expect to see a several fluctuations within the Forex market. With Donald Trump assuming his position as President, will come a leaning towards fiscal policy where monetary policy took precedence in 2016. Forex traders can expect much fiscal stimulus and should not be surprised if politics plays a major role in how the US dollar will perform on the Forex markets. The Fed will very likely take a back seat to political decisions in the US. but politics will play a role in other markets as well where elections are expected to take place. In France, major elections will take place in April with the run offs expected to occur in May. Italy and Germany will also have major elections during the second half of 2017.
President elect Donald Trump has promised that there will be an emphasis on infrastructural spending as well as tax cuts. Forex traders can expect that there will be cuts in both corporate taxes as well as income taxes. With these expansionary policies and all other things remaining equal, we can expect a general lowering in the US exchange rate, at least during the first few days of Trump being in office. But the Fed expects higher interest rates under the Trump presidency which could push up the exchange rate. So, the movement will largely depend on whether taxes or interest rates will have the greater impact. This rise in the exchange rate should take place later in the year as more bonds are sold due to higher interest rates. All these key political events should have a great effect on the Forex market. For those investing in forex and who are looking for the best forex trading strategies, it is absolutely crucial for them to keep up to date with international events.
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