Forex outlook is more crucial as an exercise when one takes into consideration, the unrelenting rise in the volume of international trade and interdependences of nations, with its attendant link to foreign exchange rates fluctuations. The volume of trade between countries is ever on the increase and forex outlook is a bird’s eye view of where we might be headed if the economic trends continue in this direction. Forex outlook at any point in time is different because of the many factors to come into play, but a systematic look at the economic events and the players will put things in perspective for the average forex trader.
There are a number of key indicators of the activities going on in the forex exchange between two countries; there are agencies who take upon themselves to collate and present to the public some of these indicators to either guide policy makers of purely for commercial concerns. Yet, there is always conflict in the forex outlook from different agencies this may be due enhanced emphasis on some indicators important to each of them or even the complete exclusion of certain other indicators that others have added. In all, it is a known fact, well established that predicting forex is not far from rocket science and forex outlook is but an arm of forecasting.
WHAT REALY IS FOREX OUTLOOK
It is the prediction made concerning the prospects of the exchange rates between two currencies. The entire key determinants are keyed in by the industry experts and a position per time of the national rates and other issues arrived at. It is a complex undertaking that has so many things waiting to go wrong. Both in established and emerging markets, the need to have this form of road map to guide the institutional investor or the average trader as to what and where to put his money has pushed so many institutions to defy the odds and map the cyclone called forex. Whatever comes out of the exercise in form of a forex outlook has always been looked at as a form of industry bible, guiding their annual planning and future outlook; from when to invest to where to invest.
Depending on the area or market to be covered, the practice is usually to handle currencies in pairs, for instance, the dollar may be paired with the pound and a forex outlook made over a time period. In doing this, there is always a careful listing of the key factors which are expected to affect this currency pair within the time window, and detailed explanation given as to why this is so. For instance in producing the outlook for the Dollar and Pound pair, BREXIT will definitely feature as a key factor or determinant of the direction of interest rates irrespective of whether the particular outlook sees the dollar falling within the particular period or the pound.
More so, evidence I s often heavily drawn from the past in designing a forex outlook as history will always repeat itself, at least to some degree.
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