Currency Wars – Why Do People Think That There Is A conspiracy Behind The Currencies Exchange Rate?
The Foreign Exchange, otherwise known as Forex is the currency trading marketplace where traders trade the currencies of different countries. USD, EUR, the Euro are some of the popularly traded currencies in this market. USD, EUR, the Euro and CHF are the abbreviation for the US dollar and Swiss Dollar cross. Trading the USD/ CHF currency pair is called trading the “Swissies”.
The Swissies have a high volatility level, which means there is great potential for profit with very little risks. This is one of the reasons why the Swiss Exchange is a preferred Forex trading platform for many small to medium size traders. USD is not a safe haven for investors. The current status of the economy in the USA is such that investing in the stock markets or any other financial instrument in the USA could get you in a huge hole at any time. Risky investments like the ones mentioned above are highly preferred by most investors.
EUR/USD, the Euro versus the dollar. As the name indicates, the EUR/USD pairs trade twice as much as the USD pair. The euro is strongly appreciated in most European countries. The euro has been trading higher than the dollar since late 90’s.
The euro has a low correlation with any other major currency pair. In simple terms, it is less affected by the state of the nation’s monetary policy. A good thing about the EUR/USD is that, it acts as a base curve in most Forex chart patterns and trend lines. It gives a clear picture of the ongoing trend and gives a better picture of the external environment.
USD vs. the euro, also called the EUR/ GBP. This is another very popular and high frequency traded currency pair in the Forex market. It was first traded over Bhat, which was an Indian currency. The GBP is usually bought when there is a probability of a break-out of the British economic slowdown. The euro is mainly traded because the central bank of the USA is keeping the interest rates of the USD under control. In a way, the euro serves as a safety cover for investors while the US economy slowly recovers.
USD vs the euro-dollar pair. This is another highly-used currency trading pair. The US economy is currently recovering but the euro has been under pressure due to the continuing economic crisis in the UK. Most investors are buying the EUR/USD this is because the euro has been successfully guarding against a possible break out of the UK economic slowdown.
The main economic indicators that have helped the euro exchange rate history is the consistent low levels of interest rates (the Bank of England), stable economic conditions, low inflation, low unemployment and rising consumer spending power. In addition, financial market activity has also had a great role in helping the euro maintains its low levels. There are a lot of people who are investing in the exchange rates between the US dollar and the euro these days. However, a lot of people think that the central bank of the US is manipulating the exchange rates in order to keep the interest rates low.
One of the other reasons why people think that there is a big conspiracy going on is because of the fact that central banks all over the world tend to intervene in the foreign markets. In fact, this is not the first time that this has happened, especially in the forex market. For instance, in the early 1990s, the European Central Bank intervened aggressively in order to keep the British pound from falling to the US dollar. In this case, it was supposed that this would reduce the strength of the English pound and help the Euro as well. Many critics believe that this intervention has led to the devaluation of the euro, although this may not have been the main reason for this.