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Global traders shorting US Dollar, emerging European economies could benefit

Global traders shorting US Dollar, emerging European economies could benefit

Traders are continuing to short the dollar despite the indications of a rapprochement between the United States and China in their trade dispute. This conflict over trade has had protracted consequences for economies and traders worldwide, but investors now appear to have settled into a pattern of betting against the US dollar. The Federal Reserve’s commitment to cutting interest rates should see the value of the dollar continue to fall, which will have positive ramifications for emerging economies.

Growing economies in South-Eastern Europe could be able to reap the benefits of the dollar’s decline. Bulgaria has enjoyed a prosperous period in recent years, ranking 5th among 28 EU member states for economic growth in the first quarter of 2019. This figure of 1.2 per cent growth surpassed the predicted figure of 1.1 per cent, which highlights that Bulgaria is an emerging economy robust enough to capitalise on the falling dollar.

Just as traders will be tracking the progress of emerging economies like Bulgaria, they will also be closely observing developments in the US-China trade conflict. The continued growth of the internet means that a trader on a different continent can now feasibly monitor situations in Bulgaria, the US or China. The DIY revolution now allows more casual traders to track their portfolio via their smartphone on the move, with trading no longer the exclusive pursuit of those with specialist training and the ability to work the markets full time.

Whether an aspiring rookie trader or a veteran of the markets, remaining apprised of current affairs across the world is imperative. According to an article on a day in the life on a trader published on DailyFX, most traders start their morning by catching up on the news events from the previous day, which can help them observe and analyse market reactions and macro trends. This has become even more significant at a time when the world’s two largest economies are embroiled in a trade battle.