easy-forex predicts rand will strengthen 8% this year

Forex traders are in for an interesting year as the world’s major currency pairs (EUR/USD, USD/JPY, USD/CHF, GBP/USD, AUD/USD) are expected to be highly volatile in 2011 in the midst of continued global economic uncertainty.

Online currency trader easy-forex expects the US dollar to strengthen helped by consecutive positive economic data underlining a sustained US recovery. It believes that investors’ demand for safe haven assets will dramatically increase as the eurozone debt crisis deepens. Heightened fears about potential eurozone periphery defaults and aggressive austerity measures will pressure the single euro currency.

Commenting on the rand, easy-forex senior dealer Peter Leonidou said the currency had appreciated by 41% against the US dollar since the beginning of 2009 and easy-forex forecast it would appreciate a further 8% in 2011. This was partly as a result of the rand‘s close correlation to the gold price and platinum prices as well as the continued benefits from the carry trade (where investors borrow capital from developed countries at near zero rates and invest in high-yielding markets such as South Africa).

easy-forex recommended holding the currency rather than trading it for anything else as the company expected the rand to strengthen against most currency pairs.