Conference Dailys TRADETech FX Daily 2018 Wrap-up | Page 13

THETRADETECHFX DA I LY
in-depth
FOREIGN EXCHANGE
Trump, China and Brexit top list of
geopolitical concerns for FX markets
TRADETECH FX EUROPE PANELLISTS
HIGHLIGHT ESCALATING TRADE
WAR BETWEEN THE US AND CHINA
AS BIGGEST RISK FOR GLOBAL FX
MARKETS.
T
he White House administration of Donald
Trump, the rise of China and the uncertainty
of Brexit have been highlighted as the biggest
geopolitical topics of concern to the global
FX markets by panellists at the TradeTech FX
Europe conference.
Unsurprisingly, the leadership of Donald Trump
as President of the US was of most concern for
FX market participants according to speakers,
due to his erratic and unpredictable nature,
particularly in relation to China.
“I see it as Trump playing this game of chicken
with China and we have seen him do that before
with Korea, but the difference is that they have
been invited to the White House,” said Thomas
Wind, executive director, head of foreign
exchange and trading, at Woodman Asset
Management. “He will not want to lose any face
in this game. He can only be in power for the
next six years maximum and China is a bigger
monster than that.”
Wind also commented that he believed Trump
would not be interested in “playing the long
game” with China, as it would be extremely hard
for the US to come out on top of a trade war
with its Asian counterpart.
The growth of the Chinese economy was top of
the agenda for other players though, particularly
when it comes to those from the US where the
brunt of the argument between the two nations
is playing out and how such geopolitical events
will often cause knock-on effects for the markets.
David Nowakowski, multi-asset strategist at
Aviva, explained the rise of China as a “more
powerful competitor” to the US was a “bigger
strategic issue”, while the ongoing negotiations
between the US and North Korea were more of a
play to realise the nation’s goals in the region.
Nowakowski also referenced the Turkish cur-
rency crisis, Pakistan debt and the interference
of Russia within Eastern Europe as significant
factors which can affect currency markets.
“When we think about geopolitics there’s a lot
to keep on the radar. These things connect to
one another and can spill over things like mass
immigration or governmental collapse,” he said.
“When we think about geopolitics there’s a lot to keep on the radar.
These things connect to one another and can spill over things like
mass immigration or governmental collapse.”
DAVID NOWAKOWSKI, AVIVA
“For example, when Russia invaded Ukraine
there were sanctions and both of those curren-
cies had around 50% moves.”
In Europe the ongoing confusion surrounding
the UK’s departure from the European Union
was highlighted, although Nigel Rogers found-
ing partner and head of trading at Adrian Lee
& Partners, was confident that there would be
positive movement on Brexit soon.
“I think things could be passed their worst,” he
said. “It seems like they will try to come to some
agreement they can hold up, hand-in-hand,
by the end of the year to say ‘we can agree’. It
could all change in the next two years while they
are finessing it, but I think they will want the
markets calm.”
The official newspaper of TradeTech FX Europe 2018
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