The Chinese economic slowdown and the commodities story continue to have huge ramifications across global markets and currencies in particular.
Furthermore the Federal Reserve will be in sharp focus in 2016 following its first interest rate rise in nearly a decade last month.
Markets will be anxious to see if the Fed will maintain its cautionary approach or if the strength of the US economy will justify a more aggressive tightening of monetary policy – something that would certainly pressure emerging economies.
For now the risk-on-risk-off mode is the order of the day across the market spectrum. We’re continuing to see flows away from GBP and EUR as those economies face slowdown as well as domestic challenges.
Likewise commodity currencies are under intense pressure as the present down cycle plays out. Both USD and JPY are soaking up some of this risk capital and are certainly benefiting in the current global economic climate.