A Year That Tested Every Trader
2023 will be remembered as a year of contradictions — falling inflation but rising uncertainty, slowing growth but stronger employment, and a global economy that refused to follow traditional playbooks.
For forex traders, it was a year of adjustment — learning to trade not just interest rate cycles, but political shocks, supply-chain shifts, and risk sentiment swings.
“2023 taught us that macro stability doesn’t mean market calm,”
explains Jaxon Reid, senior trader at Nexa Level X.
“Every major currency pair had its own story, and sometimes those stories moved in opposite directions.”
The U.S. Dollar: From Strength to Transition
The U.S. dollar (USD) dominated the first half of 2023 thanks to the Federal Reserve’s aggressive stance.
But as inflation cooled and the Fed signaled a pause, DXY retreated from 105 → 100, giving other currencies room to breathe.
EUR/USD climbed steadily back toward 1.10, supported by improving European sentiment.
GBP/USD rose after the Bank of England maintained hawkish guidance.
USD/JPY surged above 150 in October before heavy interventions pulled it back down.
“Dollar strength wasn’t about confidence,” notes Reid.
“It was about fear — and as fear eased, diversification returned.”
Europe: Surviving the Energy Shock
Europe entered 2023 facing high energy costs and a looming recession, but adaptation proved stronger than expected.
Mild winter weather and diversified LNG imports stabilized industrial output and trade flows.
The euro recovered much of its 2022 losses.
Business sentiment indexes improved steadily into Q4.
Export-heavy economies like Germany and the Netherlands benefited from China’s partial reopening.
“The eurozone surprised the pessimists,” says Reid.
“It showed that resilience can be just as powerful a trading signal as growth.”
Asia and Emerging Markets: Policy Divergence and Opportunity
Asia delivered some of the year’s best currency stories:
The Japanese yen (JPY) hit multi-decade lows as the Bank of Japan kept rates negative, then rallied sharply in December on policy shift hints.
China’s yuan (CNY) weakened amid property market stress and slow exports, dragging other Asian pairs with it.
Emerging markets (MXN, BRL, INR) thrived thanks to higher yields and global investors seeking carry trade opportunities.
“Traders who understood central bank divergence — not just Fed policy — were the ones who won 2023,” explains Reid.
Crypto’s Quiet Comeback
While 2022 was about collapse and contagion, 2023 became crypto’s year of slow recovery.
Bitcoin climbed from $16,000 → $42,000, driven by improved regulation outlook and ETF anticipation.
“Crypto rejoined the macro conversation,” says Reid.
“It started behaving less like a casino and more like a high-volatility tech sector.”
Key Themes That Defined 2023
Monetary Policy Divergence – Different pace of tightening created powerful forex trends.
De-dollarization Hype vs. Reality – The USD remained dominant despite global diversification efforts.
Geopolitical Risk Premium – The Russia-Ukraine war and Middle East tensions added volatility.
Emerging Market Revival – High yields brought back the carry trade.
Return of Discipline – Traders rediscovered the value of patience, hedging, and macro context.
Jaxon Reid’s Outlook Going into 2024
“2023 wasn’t about predicting — it was about adapting,” Reid concludes.
“Going into 2024, central banks are more cautious, liquidity is tighter, and markets will reward flexibility.
The traders who combine macro awareness with emotional control will lead the next phase.”
2023 reshaped how traders view risk and reward.
It was a reminder that information travels faster than ever, but real success still belongs to those who can stay calm, analyze clearly, and manage risk intelligently.
As Nexa Level X trader Jaxon Reid summarizes:
“In trading, you can’t control the market — but you can control how you react to it.
2023 was the ultimate test of that truth.”
