Eur/usd forecast

EUR/USD forecast is one of the most technical foreign exchange rates in the world, when it has to the do with analysis. The present state of the world’s affairs makes the exercise even more cumbersome. Yet this is very necessary as this currency pair represent a major trade window.  And because of this, the motivation for making this forecast is clearly in order. United States and Europe are major trading partners; this makes it easy to understand that there is a huge volume of grade between these two very developed parts of the world on daily basis. The euro is the major currency in Europe and only a handful of European countries use indigenous legal tender other than this particular one. So to trade the currency pair, EUR/USD, is trading the most powerful economies in the world and the whole continent of Europe.

WHAT ARE EXCHANGE RATES

It can be said without thought that the strength of a nation is indicated by the strength of its currency that is why the setting of the rate at which this currency can be exchanged into other currencies is the exclusive reserve of the nation’s apex bank. There are many factors which are considered before these rates are fixed because of it far reaching importance to the overall economy of the country and the rest of the world. For instance, an upward review of the exchange of the Dollar with the Yen can undermine trade relationship between America and Japan, lay thousands off their jobs and make a few incredibly wealthy. Some of the factors which are looked into before setting the national official rate are;

- LIQUIDITY:

This is a measure of how much money is in circulation at any given time in the nation. Or better put, it is the ratio of free money which is in the hands of the citizens to be used for day to day transactions. It is a key index in the overall money management by the apex bank.

- RATE OF INFLATION:

Inflation in a lay man’s term refers to the amount of goods chased by a particular sum of money. At each period there is an amount of inflation which is considered healthy to the nation’s economy but once fiscal control is weak inflation can slip into double digits. This is really dangerous because the value of money in such situations drastically depreciates, causing panic among the populace.

IMPORTANCE OF EUR/USD FORECAST

The EUR/USD forecast permits both investors and manufactures to hedge loses and make for easy planning.  Given the importance of these two currencies to the world economy, this appears to be one of the most important forex forecast as it hold the promise of great gain for the forecaster, when done right and a wider implication to the world’s economy. There are more forecast on this trade route most others, one other reason for this can be the wide spread and adoption of forex trading among the citizens of Europe and America.

The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.

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