In the UK, The Australian Dollar, the New Zealand Dollar and the Canadian Dollar have all been able to sustain some gains in recent months despite the challenging economic environment. In the face of rising prices and challenges in US Federal Reserve policy, experts are anticipating a slow recovery for these currencies.
However, a large number of investors are making money from the weakening AUD, NZD and CND, according to figures released by the World Federation of Exchanges (WFE). Another piece of good news is that the prospects for these currencies remain relatively strong, despite the volatile global economic environment.
In the past, when several economic shocks occurred, AUD, NZD and CND were able to maintain their substantial gains on other major currencies. When the Chinese stock market crashed in September 2020, AUD, NZD and CND maintained their consistent gains.
Today, several economic problems have emerged, which have the potential to hurt economies all over the world. It is widely believed that this could lead to increased volatility in the financial markets in the next six months. A decline in the oil prices due to increasing production levels, for example, may lead to further price fluctuations.
WFE also noted that more cases of influenza A and B have been reported in recent months, which means that viruses are becoming increasingly difficult to prevent. In addition, the intense summer heat could increase the likelihood of disease outbreaks.
According to the Federation, one major concern is that virus cases could increase in the coming months and cause further long-term strain on the health system, in addition to leading to a further decline in productivity. Inlight of this, investors are seeking out safe havens in the form of currencies that offer high inflation rates and low interest rates.
These include the Japanese Yen, the Swiss Franc, the British Pound and the Australian Dollar. Currently, the Bank of England is widely anticipated to raise interest rates, which could have a negative impact on currency values.
According to WFE, with evidence emerging that the rapidly spreading deadly Ebola virus may spread globally, virologists predict that the virus could affect millions of people in the coming months. In addition, the situation in the Middle East has led to concerns about terrorist attacks, which may lead to a further deterioration in tourism and trade.
The situation in the UK is thought to be comparatively safe, however, the chance of some type of terrorist attack is considered to be high. Experts believe that this may lead to a temporary weakness in the UK’s economy, although there are also reasons to believe that growth will pick up once the problem has been resolved.
The WFE said that they expect currency values to recover quickly, especially as the virus cases have been contained to Africa. WFE analysts also expect the United States to successfully implement President Obama’s proposed healthcare legislation, which will also create jobs and boost confidence.
According to them, the faster the healthcare legislation is implemented, the better the situation is likely to become. Several economists are predicting a more stable global economy in the future, which should eventually result in stronger growth.
The European Commission has also issued a warning that the virus cases could get worse if political leaders do not take decisive action to contain the outbreak. Furthermore, the World Bank recently published a report, which warned that the current weak global economic recovery is a sign of severe problems ahead in the future.