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The Year of the Snake could not only be the first year of a global economic recovery, but could also fundamentally change the approaches to exchange rate forecasting. Whereas earlier in the period of recession The scheme, within the framework of which the capital spillover took place on the international market, looked quite simple, now the method of analysis should be more individual in nature.

Risk fleeing and risky currencies

Over the past few years, weakness in macroeconomic indicators of the world's leading economies has signaled a worsening recession and contributed to the the process of "risk-aversion"This has increased interest in "safe haven" currencies.  YenThe Swiss franc and the US dollar performed this function due to low interest rates set by the regulators of the issuing countries until the Swiss National Bank, not satisfied with the state of affairs in the Alpine state's economy, pegged the national currency to the then-weakening euro. As a result, the list of "safe havens" was narrowed down to two monetary units.

At the other pole were the so-called "risky currencies"led by the Australian dollar, interest in which has intensified with rumors of a global economic recovery. Today, the rumors have taken a more concrete form. Gradual stabilization in the U.S. labor market, good macroeconomic data on the Chinese economy, aggressive monetary policy in Japan and the ECB's confidence in the imminent end of recession in the Eurozone allow hopes to grow into a gaining confidence.

The dollar is the market's new savior currency

The end of last year and the beginning of this year brought another important feature in the development of the currency market: the Japanese yen was removed from the list of "safe havens".. The position of the government of the country of the rising sun, which seriously undertook to stimulate GDP growth and inflation, led to a significant devaluation of the national currency. As a result, the role of a universal safe haven was assumed by the US dollar, the weakness of which at the beginning of the year was determined by the processes described above.

On the other hand, the unwillingness of the Reserve Bank of Australia to strengthen its own currency and the steps taken in this regard in the form of multiple cuts in the main interest rate have led to the fact that the status of "risky currency" is becoming more and more blurred.

Individual approach

In my opinion, in the current environment, forecasting the future dynamics of a currency pair will require individual approach. This point of view is confirmed by analyzing real interest rates of different countries.

Selected indicators of the leading countries of the world whose currencies are characterized by the greatest liquidity.

The weakest currency looks to be the British pound sterlingThis is due to the negative real yields on the assets of Foggy Albion. The British currency, which has long served as a European "safe harbor", is now experiencing the consequences of capital flows from its own economy to the potentially recession-ready eurozone economy.

The status of "risky currency" continues to pressure the Australian dollar, but the National Bank of Switzerland in the current conditions should take care of more radical steps aimed at devaluation of the franc. After all, in the conditions of global economic recovery, high real interest rate is sharpening investor interest in the currency.

Thus, the change of scenery in the world economy requires more in-depth fundamental research from traders. The previous simple schemes are becoming ineffective and require significant adjustments. The more interesting it will be to observe the dynamics of currency exchange rates in the year of the Snake.