The Forex market is a constantly changing and fluid entity, and traders must keep in touch with news and trends as they develop. With the eurozone crisis creating an even more volatile and unpredictable market climate than usual, your ability to keep in touch with the performance of individual currency pairs and their trending patterns is even more important than usual. By investing time and effort into recognizing and understanding these trends, you can maximize your portfolio and achieve the best possible results.
For the Trader: The Rising Value of the U.S. Dollar and GBP
Despite continual concerns about the performance of the U.S. and UK economies respectively, each nation’s currency is retaining it’s individual strength and value within the forex trading market The U.S. Dollar has shown particular improvement in recent weeks, thanks in part to the lowering unemployment rate and a minimal rise in the average level of disposable income per household. While it remains to be seen if this growth can be maintained, it has least allowed the U.S. Dollar to regain a modicum of strength within the market.
Similarly, the GBP (Sterling) has also remained strong throughout the last four weeks, especially in direct comparison with the equally prosperous U.S. Dollar. With a better than forecast rise in the value of property and enhanced retail figures also having a positive influence on the value of the GBP, the initial indications for the month of September 2012 look encouraging. The only potential issue is posed by the potential collapse of the eurozone, as the close trade relationships between Britain and other European nations dictate that this would have a highly detrimental effect on the performance of the GBP.
The Euro: Continued Cause for Concern
The Euro fared very poorly against the USD last month, amid further speculation that the eurozone was set for an imminent collapse. Much of this speculation is founded on continuing uncertainty surrounding nations such as Spain and Greece, as the former has still not officially requested aid despite it’s crippling levels of unemployment and rising debt. With an ECB meeting scheduled next week to discuss the eurozone crisis and potential rescue packages, there is faint but tangible hope that there may finally be some definitive news for the immediate future of Europe and it’s flagship currency.
The significant eurozone crisis shows no immediate sign of abating, and this continues to render an already volatile market place even more unstable. For forex traders the watchword is caution, at least until there are clearer market indicators and trends to determine the long term future of the Euro. Given the importance of the eurozone in terms of trade and the widespread use of its currency, the next few weeks could significant meaning for forex traders across the globe .
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