© Copyright Acquisition International 2024 - All Rights Reserved.

Article Image - Economic Signals To Consider When Trading Forex In The Final Months Of 2022
Posted 11th October 2022

Economic Signals To Consider When Trading Forex In The Final Months Of 2022

It’s a mantra that seems almost as old as time itself, but the ‘be fearful when others are greedy, and greedy when others are fearful’ strategy of Warren Buffett has served him well in more than five decades as an investor.

Mouse Scroll AnimationScroll to keep reading

Let us help promote your business to a wider following.

Economic Signals To Consider When Trading Forex In The Final Months Of 2022

It’s a mantra that seems almost as old as time itself, but the ‘be fearful when others are greedy, and greedy when others are fearful’ strategy of Warren Buffett has served him well in more than five decades as an investor.

It’s a philosophy that will be tested in the rest of 2022 with international economies facing upheaval caused by the fallout of the pandemic, the beast of inflation and the ongoing conflict in Ukraine.

Buffett’s words are treated as gospel by some, and in truth, despite the economic pressures many countries are facing, now might be as good a time as any to consider trading foreign currencies – volatility, after all, does not exclusively have to be a bad thing.

So, if you are seeking tips for trading forex in these uncertain times, here are some factors to consider.

Energy Prices

The situation in the Ukraine is forcing energy prices up for many countries around the world; however, it’s those that rely heavily on gas that have been the worst hit.

According to the International Monetary Fund, the UK has been the hardest hit anywhere in Western Europe in terms of energy bill increases, and one of the implications of that – allied to chancellor Kwasi Kwarteng’s surprising decision to offer tax cuts to one and all – is that the value of Pound Sterling has plummeted.

Meanwhile, the US Dollar is performing much better than expected, and while there are reasons – both economic and somewhat artificial – for that, for forex traders it’s essential that you understand the nuances of how energy price changes are impacting one nation to the next.

International Trade Deals

As times get tough, it’s commonplace that national leaders will look to consolidate by striking international trade deals.

These can, naturally, have a knock-on effect to the value of currency pairs, although traders eyeing the big fish – a deal between the UK and the USA – may be disappointed after newly anointed prime minister Liz Truss said that such an agreement was ‘unlikely’.

Such deals have been in short supply for the UK since the Brexit split from the European Union but talks over a pan-Asian trade agreement between the USA and 13 countries including Japan, South Korea and India continue at pace. That could be a situation for forex traders to keep a close eye on.

Interest Rates

You may be familiar with the forex trading strategy that is the ‘carry trade’.

This is a tactic that typically relies on their being disparities in interest rates between two countries that boast liquid forex trading opportunities. The success is in predicting currency pairs where a high-yielding currency can be traded against a low-yielding counterpart. It’s a risky strategy, particularly in times of great global volatility, but it’s a technique that many traders have deployed for years.

In essence, we are looking to sell a currency with a low interest rate to then re-invest and buy into a higher-interest currency, with the difference in yield being our takeaway profit.

Some nations with notable currencies have historically offered low interest rates, such as Japan, while the same is true in reverse in Australia – although rumors suggest the interest rate in the UK could hit an eye-watering 5% early next year!

Categories: Finance, News


You Might Also Like
Read Full PostRead - Eye Icon
Guide on How to Write a Dissertation Proposal in Finance and Accounting
News
18/08/2021Guide on How to Write a Dissertation Proposal in Finance and Accounting

A dissertation proposal gives your supervisor and the department an idea of the subject you wish to discuss. It also helps you to narrow down the discussion to a few ideas, especially demonstrating an understanding of the subject you wish to discuss. Professio

Read Full PostRead - Eye Icon
NMC Health Acquisition of Stake in Clinica Eugin
M&A
Read Full PostRead - Eye Icon
How to Ensure Your Business is Prepared for the Installation of Robotic Machinery
News
07/09/2023How to Ensure Your Business is Prepared for the Installation of Robotic Machinery

The integration of robotic machinery in businesses is no longer a far-fetched concept, but rather a practical step towards innovation and productivity. However, preparation is key for successful implementation. Let’s explore how you can ensure your busin

Read Full PostRead - Eye Icon
Schwartz Advisors Advises Olympus Imported Auto Parts in its Acquisition by Genuine Parts Company
M&A
30/03/2016Schwartz Advisors Advises Olympus Imported Auto Parts in its Acquisition by Genuine Parts Company

Schwartz Advisors, an M&A advisory and strategic planning firm for the automotive aftermarket, announced that the firm has acted as exclusive sell-side advisor to Olympus Imported Auto Parts.

Read Full PostRead - Eye Icon
Why Accountability is a Core Element of Workplace Culture and Leadership
News
20/03/2023Why Accountability is a Core Element of Workplace Culture and Leadership

It’s incredibly difficult to develop a successful business and a thriving team without accountability, yet so many businesses neglect to develop this aspect of their workplace culture. If no-one (even in the leadership team) takes ownership of their responsi

Read Full PostRead - Eye Icon
Capital Partnership to Acquire Northgate Capital
M&A
18/04/2016Capital Partnership to Acquire Northgate Capital

The Capital Partnership, a private investment office and independent asset manager, today announced that it has reached an agreement to acquire 100% of the ownership of Northgate Capital.

Read Full PostRead - Eye Icon
How Are Carpet Cleaning Companies Embracing The Eco-Friendly Approach
News
04/03/2024How Are Carpet Cleaning Companies Embracing The Eco-Friendly Approach

The current trend in carpet cleaning methods Reputable carpet cleaning Hammersmith companies are now transitioning towards eco-friendly cleaning solutions, representing a shift of direction towards sustainable living. By embracing the efforts to cut down on to

Read Full PostRead - Eye Icon
What is Estate Planning And Why Is It Critical For Property Owners
Finance
20/09/2020What is Estate Planning And Why Is It Critical For Property Owners

Estate planning is essentially critical for those who are property owners in their later years, and there’s some good reasons for that classification too. Here’s why estate planning is critical for property owners.

Read Full PostRead - Eye Icon
Shifting Sands – How Bank Managers have Joined the Alternative Finance Boom
Finance
09/03/2018Shifting Sands – How Bank Managers have Joined the Alternative Finance Boom

While many SMEs are worried about the transforming banking landscape, business leaders need not fear that all the experts are disappearing - they may just have to look elsewhere to find them.



Our Trusted Brands

Acquisition International is a flagship brand of AI Global Media. AI Global Media is a B2B enterprise and are committed to creating engaging content allowing businesses to market their services to a larger global audience. We have 14 unique brands, each of which serves a specific industry or region. Each brand covers the latest news in its sector and publishes a digital magazine and newsletter which is read by a global audience.

Arrow