2016 is expected to be an interesting year in the global financial markets. Currency fluctuations, diverging monetary policies and uneven global growth will make for a challenging investing environment.

Nikolas Xenofontos

Nikolas Xenofontos, Director of Risk Management at leading online trading services provider easy-forex, comments,

“2016 is definitely going to be an interesting year. There are so many factors coming into play that investors will need to be on their toes as the year unfolds. From the EUR/USD achieving parity to wobbles in the sugar market, 2016 is going to bring some challenges – but of course, where there are challenges, there are also always opportunities to those keeping an eye on the right things.”

Easy-forex has listed its five key items to consider keeping a close watch on over the course of 2016:

1. The US dollar

Firstly, with divergent central bank monetary policies, and around seven-months lows, it wouldn’t be surprising to see the US dollar continue to grow in strength for at least the first half of 2016, pushing it to parity with the euro.

2. Gold

Meanwhile gold, which has been a non-player for most of 2015, may find that higher US interest rates continue to raise the costs of holding non-yielding assets, so no immediate improvement is expected in the early months of the New Year.

3. Oil

When it comes to oil, the OPEC meeting in December 2015 failed to deliver production cuts, meaning supply remains high and the price war continues. Prices are expected to reach even lower lows in 2016.

4. Sugar

Sugar is another one you may consider watching  very carefully over the year ahead. It has avoided the general commodities slump over the past year and some analysts are expecting a steady rise in prices throughout 2016. However, this may well not be the case. Brazil, a major sugar exporter, may raise production to help offset a weaker local currency, and demand in China will be under pressure with cheaper alternatives like high-fructose corn syrup being preferred.

5. The FTSE 100

And finally there’s the FTSE 100. While there may be some brief rallies, overall it is expected to remain under continuing pressure during 2016. Slowdown in industry, apprehension over EU membership, and global weakness may all contribute to hold back the stock market.

Easy-forex’s Nikolas Xenofontos concludes,

“The outlook for trading in 2016 is certainly not as bright as it could be, but it’s also far from gloomy. Ultimately, it’s a year that should reward those who do their research and pay very close attention to all of those factors likely to impact on the markets. Perhaps not the easiest of year’s but certainly one that will be packed with interesting events!”