In recent months, inflation has made a lot of talk about itself, directly influencing various areas of social and economic life. In particular, the theme of inflation and its trend is crucial for investors, especially for those who work in the forex market, or in the buying and selling of currencies. The increase in the prices of goods and services was also followed by a series of factors, including the increase in the cost of raw materials and the shortage of some supplies which in turn directly affected inflation, triggering often a vicious circle.
Consequently, it is essential for investors to understand what could be the trend of inflation for the coming months. Unfortunately, in this sense it must be pointed out that no one can make certain predictions in this regard, as there are many factors that contribute to the advance or retreat of the inflationary phenomenon. At the same time, however, there are forecasts elaborated by the reference analysts which are certainly very interesting, as they take many factors into account.
To understand which forex forecasts may be most useful in the investment phase, it is advisable to read the guide available on e-conomy.it, a website specialized in financial training where you can find all the tools necessary to understand how the markets.
Gbp Usd 2023 forecasts: the general situation
On Italian sites you can’t find many forecasts on the Pound to Dollar exchange rate for 2023 and this is a real shame because the cross is actually one of the most present in the operational strategies of traders from all over the world. It is a liquid exchange that offers many opportunities for speculative entry.
Given this limit, it becomes necessary to look at foreign sources where there is no shortage of ideas. Let’s start with the current situation which is reproduced in the GBP to USD real time chart available online on many trading websites.
As you can see, the cross currently stands at 1.21. We are practically on the same levels as at the end of the year and we are still far from the lows that the exchange rate reached towards September at 1.13.
This is the starting point from a graphical point of view. As far as fundamental analysis is concerned, however, there seems to be something different compared to the end of 2022. In fact, the FED, while confirming its aggressive approach to rate hikes, seems to have abandoned the most extreme phase and consequently the chances of revising increases in the cost of money by 75 basis points are lower. Furthermore, it should also be taken into account that at least in the United States inflation seems to have reached its maximum peak. This suggests that the hardest phase of the rate increase may be behind us at least on the American side.
How to make forex forecasts
In addition to looking at inflation trends, it is important for currency market investors to try to understand which currencies are likely to increase in value over a given period. Although there are some currencies that continue to be very popular, such as: the dollar, the euro, the yen, the pound and the Swiss franc, it is possible for investors to analyze the currencies of so-called developing countries as well development. This operation is far from simple and involves the control of many different parameters. Some of the main ones are:
- The technical analysis.
- Investment trends.
- Fundamental analysis.
- Purchase power.
- Economic strength.
- Signals.
Technical analysis is based on the historicity of prices, i.e. on the trend that currencies have had over time. Investment trends can be very useful, even in the forex market, for short-term traders as they can signal overbought and oversold territories in securities. Fundamental analysis, on the other hand, is more important for those who operate in the long term as it tries to take into account the current macroeconomic trend. The purchasing power of a currency is another very important parameter, which is often analyzed by expert forex traders to decide which currencies to invest in.
Another fundamental factor concerns the economic strength of a currency, or rather its weight in international negotiations. Finally, there are the forex signals which in some cases can prove useful but which should always be chosen with great caution and only when they come from certified and well-known entities. In conclusion, therefore, today it is very important for those who invest in the currency markets to take into consideration all the factors that can influence the performance of the currency market, obviously starting from inflation, and to have a prudent attitude, especially in phases characterized by greater risk. , like the current one.