For most of this year, market activity in the Euro has shown surprising strength. To explain most of this activity, we can look at comments from the President of the European Central Bank (ECB) and assess a broader level of confidence in the region’s most indebted nations.
The countries on this list include names like Greece, Italy, Portugal, and Spain. And so it is not entirely surprising that more of the market’s attention has been focused on the political unrest that has been seen of late.
Specifically, there has been an escalation of protest and rhetoric in the region of Catalonia and this has already had a marked effect on the way that stock markets have been trading for both the country and the region.
One area the influence has not yet been felt is in the Euro itself, as the currency has held up relatively well in the face of all of the recent news out of the region. When looking to invest or trade a currency, it is generally a good idea to start out with a demo trading account, to experience the markets under live trading conditions without risking any money.
Investors have started to make their presence felt, as currency pairs like the EUR/USD and EUR/JPY are now pressing against critical range zones that could determine the broader trends that are ultimately seen in 2018. The ECB is currently facing important policy issues that have to do with the pace of consumer inflation and the potential need for higher interest rates throughout the region.
Higher interest rates are typically not good for the stock market – but they are a good thing for the currency markets. This means that the higher prospects for interest rates could be one factor that saves the Euro if investor confidence starts to be taken down by the recent protests in Catalonia Spain.
Over the last year, the Euro has had some impressive periods of strength given the broader context of what is currently seen in the world economy. So this is why investors will be watching for the extent to which sell-offs occur after major news headlines focus on the protests in the region. If there is enough attention paid to the next round of voting procedures in the country, we could see some further declines in the Euro against major counterparts like the US Dollar, Australian Dollar, and Japanese Yen.
These are some of the best currencies for assessing the broader trends in the Euro given the strength of the trading relationships that are seen throughout each of these regions.