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Five Events That Could Move the Market In 2020

The dips and rises of currency pairs can greatly affect a company’s bottom line. While it’s impossible to perfectly predict major market moments, there are a number of significant world events that are likely to make an impact.

While it’s impossible to perfectly predict major market moments, there are a number of significant world events that are likely to make an impact.
While it’s impossible to perfectly predict major market moments, there are a number of significant world events that are likely to make an impact.

As financial institutions and credit unions plan for 2020 budgets and activities, it’s difficult not to contemplate possible market movements for the next 12 months. Customers often look to these organizations to provide guidance on their financial future and likely to seek clarification after sudden market shifts. This is especially true for business owners with an international component, who must manage foreign funds. The dips and rises of currency pairs can greatly affect a company’s bottom line. While it’s impossible to perfectly predict major market moments, there are a number of significant world events that are likely to make an impact.

What events could move the market in 2020?

  1. US-China Trade War: Because of the global repercussions of the long running trade war, much of the globe is awaiting an interim trade deal between the two countries. Right now, the US is scheduled to impose a new set of tariffs in December – effectively targeting almost all imports from China. Yet it’s possible the two leaders could meet in early December 2019. So far, markets have shown positive movement after indications of reduced tariffs or rollbacks.
  2. Brexit, January 2020: The EU extended the Brexit deadline to the end of January but the situation across the pond is constantly in flux. The UK is holding a snap election on December 12 where they could extend the tenure of Boris Johnson or elect their fourth new prime minister in four years.
  3. US Election, November 2020: This is an obvious one, but the influence of election day extends far beyond just November 3. Democrats are still inching towards a party leader and as the long race reaches the finish line the markets could take notice. In the meantime, US policies on trade and international relations can nudge portfolios in either direction.
  4. Global summits, November 2020: During last year’s G20 in Japan, investors were hopeful that US President Donald Trump and the Chinese President Xi Jinping could settle the trade war. The optimism brought the S&P 500 and Down Jones Industrial Average close to record highs. It’s tough to predict the impact of the next event in Saudi Arabia, the first time the G20 Summit will be held in an Arab country. Hot topics are expected to be climate change and trade, though it falls mere weeks after the US election, so headlines remain to be seen.
  5. Recession?: The past few years have been marked by incredible growth but some economists predict a downturn with concerns over the long-term trade war, government debt and trouble in the manufacturing sector. Though decreases have yet to materialize, investor confidence could wane as the new year progresses.

Planning for your 2020? Avoid uncertainty and currency fluctuation. Speak to one of our FX risk management specialists today.