After a rollercoaster year for Sterling, there’s still a long way to go if it wants to revisit the heady heights of 2016. However, if there’s a year in which the recovery can really mount a charge towards its pre-Brexit highs, it’s 2018.

With a range of events scheduled that could alter the foreign exchange landscape for years to come before even considering any more major shocks, FX traders will need to have their fingers on the pulse in 2018.

Thankfully, Accendo FX is here to provide you with a handy guide to the year’s major new and continuing macroeconomic and political themes.

2018: The year of Brexit

The UK voted out in 2016; March 2017 saw the triggering of Article 50 and the beginning of the formal Brexit process; 2019 will be the date that a transition period begins or the UK leaves the EU, with or without a deal. However, 2018 will be the most important year for Brexit of them all.

2018 will see the start of all-important trade talks between the two parties, potentially beginning in March and continuing until the end of the year.

The EU’s Chief Negotiator, Michel Barnier, has warned that no deal can be reached before the 2019 deadline. His UK peers, however, will be doing everything in their power to secure some sort of trade deal before EU Commission President Jean-Claude Juncker’s October 2018 deadline.

It’s crunch-time for the UK.

Can negotiators hammer out a deal, including some sort of transition agreement, before time runs out? Will there be single market access for UK companies? All will be revealed in 2018.

Bonne Chance, Europe

After the Netherlands, France, Germany and Britain all went to the polls in 2017, Italy is the final major Eurozone economy to elect a permanent leader.

The country has been without an elected leader since Matteo Renzi resigned from the position of Prime Minister in 2016 after a failed referendum on reforms.

That is set to change, however, as Italians vote on 4 March. The populist 5 Star Movement gained a foothold in local elections and, should it perform strongly in March, could pose a major threat to the resurgent EU under Franco-German leadership.

Farewell Janet, welcome Jay

2018 already has one notable retiree on its books. Janet Yellen, Chair of the US Federal Reserve, will leave both her post and the Fed entirely, giving way to her colleague Jerome Powell who was nominated to the top job by President Trump in 2017.

The new Chair, a former investment banker, will now navigate the world’s largest economy through its course of policy normalisation, following almost a decade of extraordinary accommodative policy.

Will Powell follow Yellen’s monetary policy lead or guide the central bank along a more hawkish road?

2018 Wildcards

Could a leadership race force a new UK government? Will the US go to war with North Korea? Could President Trump face impeachment after Mueller’s special investigation? Might the Chinese economy endure a hard landing after years of speculation?

Over the page, we analyse the top three currency pairings traded by Accendo FX’s clients.