While 2017 and all the political chaos it brought with it may now be behind us, it’s time to look forward to the new year ahead. Given the range of elections and other potential political events scheduled for 2018 though, it doesn’t look like it will be much smoother sailing. There are many important global dates coming up over the next 12 months which could all have a significant impact on the pound’s value as well.
Italian General Election
There are no UK elections set for 2018, unless the current Prime Minister stands aside and a snap election is called. Across the rest of Europe there are a number of elections due to take place in key eurozone nations. The biggest is arguably the Italian General Election which should happen before May.
Not only is it a major member of the eurozone, but should Eurosceptic party Five Star Movement come to power, the nation’s use of the euro could come under threat. This may have a knock-on effect for the pound, potentially strengthening it in light of what would be a volatile euro.
US Midterm Elections
The first serious electoral test for President Trump will be the midterm elections in November. Results of these will have a big impact on his presidency and government policy, which in turn could see the US dollar either weaken or strengthen. Should the dollar weaken ahead of and during these elections then the pound could make gains, depending on how close or far apart the results are. Until then there are still around ten months where anything could happen in the US anyway.
Japan’s Constitution Referendum
Japan also doesn’t have a general election in 2018, unless current Prime Minister Shinzo Abe stands down. This could happen, with him expected to amend Japan’s constitution later in the year to expand the remit of Japan’s armed forces abroad. However, if he loses then he is bound to resign, introducing turbulent times for the yen. Traditionally a safe currency, if this occurs it could see the pound benefit.
Central Bank Leadership
Aside from elections, a few terms for leadership at the US Federal Reserve, People’s Bank of China and the Bank of Japan could nearly be up. These may then see a change in monetary policy with an impact on currency value too. With a decent trading platform, these political events that could see the pound rise or fall in value, alongside other currencies, do offer plenty of exciting opportunities for forex traders throughout 2018.