It doesn’t seem that long ago when the U.S. dollar was gaining against its counterparts and the euro was stuck in a multi-month slump. Now, the currencies have almost reversed as speculation arises that both currencies may receive stimuli.
In the chart below, Forex Analyst Mark Maldonado saw a 269 pip move in the EUR/USD pair within the week.
So, if both currencies potentially receive stimuli, why is the news affecting the currencies in different ways? Here’s why: Euro buyers are hoping that the bond-buying stimulus may lead to the financial boost its economy needs to help countries, such as Spain, out of their debt crises. On the other hand, if the U.S. Federal Reserve provides another stimulus package, the increased printing of bills will more than likely lead to inflation. This would, in turn, lower the U.S. dollar’s value.
As these currencies change places and what once was up slowly falls down, the currency market is creating trading opportunities that you could take advantage of. Forex education could prepare you to take advantage of these market moves and make strategic trades. Are you tired of being left behind? Attend a FREE, LIVE! webinar by completing the form below.