XTB Post-US election outlook: 90% chance of December Fed rate hike


After America had chosen their new President last week, where Donald Trump unexpectedly won the US Presidential race, the financial markets had experienced a wave of turmoil. Traders are now wondering what to expect from Forex brokers after the elections? AtoZ Forex has reached out to XTB, inquiring on XTB Post-US election outlook and status.

17 November, AtoZForex Currently, with Republican Nominee having a place in the White House, it is high time to analyze the environment in the financial markets and start thinking about the further steps under Donald Trump’s leadership. AtoZForex team has been meeting and interviewing Forex brokers globally to get their view on the market in the wake of the Republican victory.

AtoZ Forex Industry News Manager, Kristina has spoken with Joshua Raymond, the Chief Marketing Officer at Forex broker XTB. Below, we present to you the key highlights of XTB’s Post-US election market outlook.

Kristina Frunze: Was there any change in XTB’s margin requirements?

Joshua Raymond: “Yes, we decided to increase margins (reduce leverage) in the markets most affected by the US election such as USD crosses, US, and European Indices. The main reason for this was to help protect clients during what we believed would be a period of high volatility, which indeed it proved to be.”

Kristina Frunze: Have you brought the margin requirements back?

Joshua Raymond: “Yes, all of our margins went back to their normal low levels within 24 hours of the US election result, where clients can again trade with leverage up to 200:1.”

Kristina Frunze: What was the most traded instrument for XTB?

Joshua Raymond: “There were 2 markets which clearly were favored by our clients. USD/MXN was a very popular as the Mexican Peso fell 10% against the US Dollar in reaction to the Trump win. This was a forex pair highlighted by our analysts strongly in the run-up to the vote and so our clients seemed to be well prepared for this move. We also saw lots of trading in US500, the S&P 500, which also saw big volatility on the back of the election. Gold, DE30 and USD/JPY all saw big volume too.”

Kristina Frunze: What does XTB research team expect for the USD until the 20th of January?

Joshua Raymond: “David Cheetham, market analyst at XTB said: “The US dollar has soared higher in the past week since Donald Trump became President-elect, with sharp increases in bond yields and the possible large-scale repatriation of the buck amongst the chief driving forces for the rapid appreciation.

Looking ahead, political developments are likely to remain at the forefront of traders’ minds when positioning in the US dollar and next month’s Fed meeting could also provide a catalyst for some major moves. Last December saw the US central bank hike interest rates for the first time in almost a decade and despite forward guidance which suggested four hikes would be forthcoming in 2016, as of yet there has been no change. Market expectations of a repeat this year are high with derivatives markets suggesting more than a 90% chance of an increase next month and volatility levels in the greenback are likely to remain elevated for some time yet.

Dollar bulls certainly seem to have momentum on their side at present, but there could be several twists and turns in the coming months and with the buck trading in a relatively narrow range since early 2015 there could be a major breakout on the cards, with the balance of possibilities seemingly favouring a move to the upside.”

Kristina Frunze: What recommendations can XTB give to traders trading this week?

Joshua Raymond: “As an execution only broker, we don’t provide investment advice to our clients. This way, we remain completely neutral and are motivated to give our clients best execution to their trades via our award-winning technology.”

Kristina Frunze: Do you have any special promotion for traders?

Joshua Raymond: “We offer Cashback for active traders, where they can earn a cash rebate every month based on the amount of trades they place. We also offer up to £600 cash bonus as part of our Refer A Friend program. Terms and conditions apply for both promotions.”

Risk warning concerning our analyst comment in question 5:

This article is provided for general information purposes only. Any opinions, analyses, prices or other content is provided for educational purposes and does not constitute investment advice or a recommendation. Any research has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Any information provided does not have regard to the specific investment objectives, financial situation, and needs of any specific person who may receive it.

Past performance is not necessarily indicative of future results, and any person acting on this information does so entirely at their own risk, we do not accept liability for any loss or damage, including without limitation, any loss of profit, which may arise directly or indirectly from the use of or reliance on such information.

When XTB provides trading analysis and/or research, the author of this article may have an interest in the instruments mentioned. XTB has policies in place to identify and manage any conflicts of interest that may arise in the production of research and the provision of trading analysis.

Do you have questions for Joshua Raymond about XTB or market post the US elections? Let us know in the comments section below.

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