The financial markets are an excellent indicator of how a country’s economy is performing and an excellent tool for entrepreneurs. Whether you’re hoping to invest in a particular financial market as an entrepreneur yourself, or looking to gauge opportunities and successes from it for your own start-up, they cannot be ignored. That’s why keeping a close eye on movements and predictions in financial markets is essential as an entrepreneur. Current forecasts for the financial markets may affect you in various ways.
Currency Market
The currency market is the most traded in the world, with around $5 trillion traded every day. It is also one of the most volatile, with currency prices fluctuating on a regular basis due to all sorts of factors. Currently there is plenty of unpredictability surrounding the currency market because of ongoing Brexit negotiations, elections across Europe and the first few months of President Trump’s leadership.
The pound has recovered somewhat since the Brexit vote almost a year ago, but is still nowhere near its previous levels. Its value over the coming weeks will depend a lot on the result of the general election and Brexit negotiations, with a weakening expected before the election.
Other countries which have a weak currency compared to the British pound can present a great opportunity for entrepreneurs to expand into. The likes of Iran, Vietnam, Laos and Indonesia currently have weak currencies, which offer a good opportunity to set up an exporting business.
Stocks and Shares
Stocks and shares, and especially indices, are excellent barometers of not just an economy but the success of certain sectors. Entrepreneurs can monitor these to see which areas are doing well, to jump on the bandwagon, and which are struggling, providing a potential opportunity to enter a new market competitively.
Elections do affect stock markets as well, with the French stock market falling before its presidential election due to fears of the anti-EU Marine Le Pen’s chances of victory. With the UK’s snap election coming up, the same is expected to happen. Therefore, potential opportunities that crop up may only be temporary and based on the election, while for those wishing to invest in stocks it will be worth doing so before the election and selling after to make a profit.
Commodities Trading
Commodities can be traded in a similar way to stocks and shares and their prices can be important for entrepreneurs in many ways. Firstly, trading commodities can offer a great way to increase your profits. Secondly, the price of certain commodities can impact upon the costs for your business if you require them in the manufacture of products you sell.
Recent movements have seen oil prices drop to a six-month low and metals have fallen too. Since April 1st iron ore has fallen 16.5%, oil 10.1% and Nickel 9.9% for example. If these are to continue then entrepreneurs could find their costs reduced, as well as investments for those who trade commodities.
If you’re an entrepreneur then make sure you keep a close eye on financial market forecasts to make the most of what is expected.
