UAE foreign exchange market 2021 | Markets – Gulf Information

As with 2020, buying and selling professionals consider that the US greenback will proceed to play a pivotal function in markets in 2021. In keeping with Monte Safieddine, a Market Analyst at IG, “With regards to the FX majors in 2020, the US greenback is the reserve foreign money that was most wanted at the beginning of the pandemic as liquidity considerations surged, solely to retrace and go into retreat due to central financial institution insurance policies and a strategic aim of a extra accessible buck.

Safieddine additionally says that the Australian and Canadian {dollars} carried out properly on the finish of final yr. “A restoration in commodity costs on expectations of progress and elevated threat urge for food gave the Australian greenback – a high-beta and commodity foreign money – the next end for the yr, whereas oil costs clawing again misplaced territory aided the Canadian greenback’s power underlying.

Safieddine says that the latest change of American authorities will proceed to focus consideration on the US greenback. “With an enormous stimulus package deal promised by the brand new administration within the US, focus will stay on the place the greenback will go from right here, whereas vaccine roll-out and effectiveness shall be an element usually urge for food for threat and commodities, and in flip threat and commodity-related currencies.”

Raed Alkhedr, Equiti’s Head of Market Analysis & Evaluation, additionally says that the commodities market could appeal to investor consideration in 2021. “Commodities are more likely to have essentially the most alternatives for traders in 2021, particularly gold, with international resolution makers debating the implementation of robust stimulus insurance policies in an try and stimulate the financial system and minimise the dangers posed by one other Covid-19 outbreak.

“US President Joe Biden and US Treasury secretary Janet Yellen intend to implement a Covid-19 aid plan amounting to $1.9 trillion, and this might enhance demand for gold within the coming interval as it might be used as an inflation hedge.”

He additionally believes that Covid-19 vaccines shall be helpful to different markets. “The distribution of vaccines performs a reassuring function for the monetary markets, particularly for foreign currency trading since any advances to beat the pandemic, apart from authorities and central financial institution interventions, may encourage traders to hunt buying and selling alternatives within the foreign exchange markets because of elevated buying and selling volumes, and with it elevated volatility. A profitable vaccine roll-out ought to stabilise foreign money and cut back volatility as we have now not too long ago seen.”

Michael Stark, Market Analyst at Exness, says that figuring out the place to put money into 2021 is tough to foretell, significantly following Brexit and with the persevering with points nations face with the pandemic. Within the case of Brexit’s affect on the UAE foreign exchange market, he says, “It’s tough to say for certain, however for the second, nothing a lot. Covid is clearly a way more instant concern, however equally the last-minute settlement between the UK and EU successfully means no change from the transition interval by way of regulatory alignment and so commerce.

As extra particulars grow to be clear on the restoration or lack thereof in UK – EU commerce this yr, logically one would count on that the pound has restricted room for good points however appreciable house to maneuver down in opposition to most different majors.”

Stark says {that a} cautious strategy needs to be taken with all investments and particularly with cryptocurrencies resembling Bitcoin. “Individuals ought to by no means soar into any funding with none warning in any respect. That stated, cryptocurrencies and significantly Bitcoin advantage particularly excessive warning due to their extraordinarily robust good points since December of final yr and the impossibility of valuing them objectively. The comparability of fundamentals and charts of assorted shares can be confused, with many having appreciated sharply in value since final summer season whereas not displaying clear potential for progress in revenue or EPS.”