Today, we will speak about 2013's best performer, the poundsterling, and two 'minor' major currencies, Aussie and Kiwi.

From yesterday's discussion, we could conclude that USD is the currency with the biggest potential in 2014, Euro is going to remain strong despite of its many misgivings, and USD/JPY will continue its downtrend with considerable risks. Today, we will speak about 2013's best performer, the poundsterling, and two 'minor' major currencies, Aussie and Kiwi.

forex

 

Best Performer

GBP was surprisingly tough in 2013, following the continuation of BoE's Funding for Lending scheme (FLS) and subsequent better forecasts on UK economy. We could expect it to go steady in 2014 if the economic performances are good enough.

GBP/USDChart of GBP/USD in 2013

However, we should keep in mind that many analysts are in doubt over whether the UK's recovery is already stable or not. The possibility of decline in statistical data can't be extinguished, and therefore, because expectations are high, if there is any fall, it will be very painful.

 

Aussie and Kiwi

Regrettably, AUD's performance in 2013 is quite bad. Unlike JPY, it is still far from its lowest point in five year. However, it has no good prospect either, as the RBA continues with their monologue of 'lower interest is better for economy' and the China's growth expected to become slower in the coming year. It is bad enough that RBA cut interest rates twice this year, we can't imagine just how much damage will occur if they cut it again.

On the opposite, NZD seemed to be increasingly attractive. During 2013, New Zealand recorded better GDP, increased employment, and narrower balance of trade. The RBNZ, New Zealand's Central Bank, also mentioned that it will start increasing its interest rate in the first half of 2014 due to the rises in inflation. It gets even better. Unlike its counterparts, RBNZ doesn't show any intention to intervene the market through stimulus or open market operation. There are all the signs of better prospect for the economy with none of the minuses.

The highlight of 2013 was Central Bank's race on monetary policy. This doesn't seem going to change in the next year. So, keep your eye on major central banks, and don't remiss in planning your trading.