The main question among forex traders today
On the online forex trading front for this week, a few key movements are taking pace in Europe that have drawn considerably interest from currency traders.
One movement that has gained considerable attention is the fact that the Swiss deflation rate fell to a profound eight month ow in March. This has mainly been caused by the price of consumer goods falling; induced largely by the flow of liquidity from traders looking to hedge themselves against a weakening Euro. In turn, this has obviously strengthened in the CHF.
The main question debated by forex traders today
The main question that many online forex traders are debating is whether Europe itself has turned the corner from its recession and the Euro will present itself as an attractive investment opportunity. Considering the CHF has seen such marked deflation, some investors may soon consider moving their money back into the Euro as a short-term profit venture.
Portugal in in stagnation
The other concern, although perhaps slightly underplayed, is the continuing stagnation of Portugal. Recently, the Portuguese government stated that yet more austerity measures would have to be put in place following the drastic cuts that ha been so widely publicised in the past.
Cyprus haircut gives strong Euro signals
This undoubtedly signals a continued weakness in this region. Furthermore, the drastic “haircut” that Cypriot citizens and foreign investors who have more than 100,000 Euros in Cyprus banks may lose op to 60% of their savings in order to shore of a flagging economy.
While the immediate effects of this have not yet been fully realised, some online forex traders question whether we may witness a further exodus from the Euro as a result. This may be particularly true for the larger investors who will need to recuperate any losses incurred.
Euro strength?
Still, the overall mood regarding the strength of the Euro remains neutral to slightly bearish and in such a situation, any negative economic data out of struggling Spain or ailing Portugal may once again rattle the forex markets in the days and weeks to come.
