Currency Markets to See Reflation Trade Drive Moves in March

Strategists polled by Reuters recently expect the reflation trade concern to drive moves in currency markets through the current month as well. The high volatility in government bond yields had scared global markets, causing a sell-off in global equity markets and scaring investors from trading riskier currencies as well during February.

Markets have been concerned about the numerous stimulus efforts and monetary easing by governments and central banks sending inflation higher even as they help boost economic recovery in the wake of the coronavirus crisis. A significant majority of strategists polled forecast the reflation trade – the upbeat mood in anticipation of economic recovery, to drive moves in global currency markets during this month as well.

In addition, the poll also indicates an extended weakness for the US dollar against other currencies through the year. Previous editions of the poll had also expected the greenback to trade bearish against its peers as the global economy recovers, weakening its safe haven appeal and driving up the demand for riskier instruments and currencies instead.

Other polls by Reuters expect the global equity markets to continue to rally through 2021 amid rising hopes for the COVID-19 vaccine rollouts to bring an end to lockdowns and restrictions. Meanwhile, strategists forecast the maximum amount of bullishness in commodity currencies, owing to a rise in commodity prices as the market sentiment improves, followed by developed and emerging market currencies.

Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies
ABOUT THE AUTHOR See More
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
Related Articles
Comments
0 0 votes
Article Rating
Subscribe
Notify of
0 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments

HFM

Doo Prime

XM

Best Forex Brokers