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Having 5 out of my 8 predictions for 2012 come true, I have to say that I’m pretty proud of my Nostradamus skills!

Although there were speculations that the SNB would raise its peg, it didn’t. I hit the nail on the head by predicting that central banks would engage in some form of easing though. The Fed gave in to QE3 while its counterparts such as the ECB and RBA lowered their borrowing costs.

The ECB’s bond-buying program also proves that the debt crisis got worse during the year. (Heck, the central bank is willing to purchase UNLIMITED amounts of bonds!)

On top of those, I was also right about Justin Beiber and Selena Gomez breaking up during the year (but last I heard they’re back together again), Mark Zuckerberg got married, and Psy’s Gangnam Style put Rebecca Black’s popularity to shame!

Now let’s see how good my predictions in 2013 will be. You ready? Here they are:

EUR/GBP will test its all-time lows around .6000

I have no illusions of grandeur that the European debt crisis will get solved within the coming months. In fact, I think it would only get worse! When that happens, I’m sure market participants will be on the hunt for a safer asset to park their money on.

We’ve seen the pound act like a safe haven asset in the past and I don’t find a repeat of that price action hard to imagine for 2013. After all, the U.K. seems to be in much better shape than the eurozone.

And let’s not forget that Mark Carney, who is dubbed by some as the best central banker in the world, will be in charge of the BOE. I’m pretty hopeful that the ex-BOC Governor will be able to help strengthen the British economy’s recovery.

Shinzo Abe will bring on the big guns

With the Liberal Democratic Party (LDP) now back in charge in Japan, it will re-establish itself as the force du jour in the Japanese political scene.

In order to show everyone that he means business, LDP top gun Shinzo Abe may just pressure the BOJ to implement more aggressive easing measures to weaken the yen and boost the country’s exports.

We’ve already seen it happen during the latter part of last year. So don’t be surprised if we see USD/JPY trade to levels we haven’t seen since 2009! That’s right folks, I don’t think 100.00 is that far-fetched for 2013!

The U.S. fiscal cliff will steal the spotlight from the eurozone debt crisis

The European debt saga has been around since 2009 and I think that market participants have somehow gotten tired of it. In 2012, it seemed like investors had already begun bracing themselves for the worst. I mean, there were instances when the euro rallied on the prospect of a Spanish bailout.

Heck, if that had happened a year or a couple of years ago, market reaction would’ve most probably been different and the euro would have gotten sold off aggressively!

This makes me think that perhaps fiscal woes of the U.S. will have a much bigger effect on price action similar to what we’ve been seeing in the past few weeks.

Now enough with the serious stuff! I’ve surveyed the FX-men on what they think would happen in the coming year and here’s what we came up with. Try to guess who predicted what!

  1. Kim Jong Un will attempt to outdo South Korean Psy’s hit “Gangnam Style” by coming out with a single of his own entitled “Pyongyang Style.” The North Korean leader will feel emboldened by winning TIME magazine’s “Person of the Year” award that he will come up with his own song too! It will feature a dance number that mimics the movements of an ostrich and will stay at the top of the charts for a record period of time.
  2. Facebook’s popularity will plummet. It will come up with a “Follow Closely” function which will basically allow everyone to creepily stalk anyone on it! Location, recent conversations with other people, and even information on a person’s habits will be publicly available. Consequently, millions of users switch to another less popular, but less stalkerish social network: Google+.
  3. Apple will release a new phone, the iPhone 6S. Only a mere two weeks after the iPhone 5S release in the spring, will Apple release the iPhone 6S. It will sport a 5-inch screen with UltraRetina 3D, new “touch free” features and apps, and 100 gig mobile internet download speeds. Siri will be replaced by a holographic Steve Jobs who will tell you how “truly magical” the iPhone 6S is–no matter what you ask it.
  4. The zombie craze will die down. Popular media’s obsession with the undead will finally come to an end. Zombie-related movies will be snubbed. That TV series on the zombie apocalypse will get canceled (you know which one I’m talking about!). However, the world will develop a weird fondness for orcs following the release of The Hobbit movies. So if you want to plan ahead of time for Halloween, do yourself a favor and ditch the zombie costume! Dress up as a wrinkly, face-pierced, foul-mouthed orc instead.
  5. Mars rover Curiosity will report very interesting images from Mars. After months of exploring the red planet, Curiosity will send back images to Earth that will convince some about the existence of aliens. The photos could reveal what looks like a shelter, a trail of some sort, or an exoskeleton of another unknown being. Bookings for space travel will then skyrocket following the news.

There ya have it, folks! These are what we expect to happen in the coming months. But I’m curious to find out! Which currency do you think will be the strongest against the USD in 2013?

The Aussie got the most votes in last year’s poll followed by the pound. It would be interesting to find out which will be the favorite for the coming year.

Anyway, I hope you have a great year ahead!