Where is the risk in 2010?
Posted on December 23, 2009 by John Trevors for Luckyroom.com
The risk that national debt, upcoming elections, social disruption, insoluble issues between the U.S. and China could affect international markets in 2010. Below a list of the most important factors that might lead the international financial scene to an overall risk or even catastrophy. Traders should understand that although the Chinese market seems to be on a good run, the risk from trading its currency or even trading the dollar against the yuan at any online forex trading platform still remains high as there is uncertainty in the market still.
- Risk of state debt repayment
Concerns for Dubai, Ukraine and Greece spread to international markets last month and the three countries are likely to continue to receive political and financial pressures next year, although most economies are back on track with development. The new crisis in one of these three economies could trigger major turbulence in the bond markets with implications around the world.
2010 is expected to be a year of many elections, the elections for the new Congress in the U.S. and in Britain and Brazil could lead to a change in leadership. In emerging Europe, elections are expected in Hungary, Latvia, Poland, Czech Republic and Slovakia. The Australian prime minister is expected to win another term in control and the only question remains the timing of elections.
- Social unrest, nationalism
The risk of social unrest is growing as Western governments begin to withdraw support measures of the economy. Social unrest in China could be highly destabilizing markets, while the crisis may continue to trigger volatility from Thailand to South Africa and Iran.
- U.S. and China
The pressure on Beijing to allow the strengthening of its currency will increase further in 2010, but the Chinese government would not want to allow the economic recovery to strengthen its currency too quick as it would surely create a drop in exports. In the U.S., the weakening of the Chinese currency is protectionist policy that threatens to revive the U.S. economy.
- Unforeseen crisis
Risk is an ongoing nuclear standoff with Iran, as North Korea continues to be dangerously unpredictable. Uncertainty also exists in the markets of Nigeria and Thailand because of the health of the President and the King respectively.
Source of info: reuters.com
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