It’s that time of the year once again – it’s the season of giving in more ways than one. With barely ten days to go before 2016 kicks in, I’d like to present you with the pre-Christmas top trading picks for indices, commodities, currencies and equities. The final 10 days of December are typically characterized by light trading activity owing to the absence of traders at their desks. Christmas vacation, school holidays and shorter work weeks are the norm. Nonetheless, there are several economic opportunities available to binary options traders that are simply too good to resist. Without further ado, let’s get started with the Christmas shopping list of tradable assets that you can profit handsomely off this week.
How the latest news headlines can help you make some winning trades this week
The recent Fed rate hike on Wednesday, December 16 was the talk of the town. Now that the Fed has increased the Fed Funds Rate by 25-basis points, we are going to see several important economic implications of this decision. Foremost among them is the impact on emerging market economies and emerging market currencies. We have already seen major EM currencies like the South Africa rand, the Turkish lira, the Brazilian real, theVenezuelan bolivar and the Russian ruble struggling against strong depreciation headwinds.
The Chinese currency has broken a successive streak of 10 losing sessions since the People’s Bank of Chinastepped in to arrest the declines by implementing a 0.09% strengthening of the Renminbi. The USD/CNY currency pair weakened (for the USD) and the Chinese yuan has made up some lost ground. This is the first time the PBoC has fixed the currency in 11 days. Despite being included in the IMF SDRs as one of the world’s reserve currencies the PBoC is still heavily involved in currency fixing. This is evident in the relatively insignificant 4.5% depreciation of the yuan against the USD in 2015. The 3-month forecast of the yuan has been sliced from 6.4 to 6.55 owing to capital outflows (Credit Suisse).
The USD has capped most of its gains for the year and there are no real expectations of further substantial rallies of the greenback. Perhaps closer to April 2016, we will see another move by the Fed to hike rates, and possibly again in June 2016. By the end of 2016 analysts are expecting the interest rate to hit 1%.
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