Every week we provide insights into popular assets and hot questions, so you can easily learn more about the investment market in bite-sized pieces.
In this Markets in Focus we take a closer look at Dollar & Euro.
The US Dollar has been getting stronger and stronger, reaching levels we haven’t seen since November last year. Big changes in the US government are shaking things up. With Donald Trump elected and Republicans taking control of both the Senate and the House, traders are expecting new rules like higher taxes on imports and tax cuts for businesses and people.
Meanwhile in Europe, the European Central Bank (ECB) might keep making it easier for people to borrow money. This is the opposite of what’s happening in the US, where interest rates are staying high.
Recently, the EUR/USD pair dropped to the infamous level of 1.0500 — the “bounceback point”. Historically, prices bounce back from this point, creating trade opportunities.
But here’s the catch: a proposed 10% import tax in the US could raise prices on foreign goods. This might worsen inflation, pushing consumer prices up.
Big changes like these are why the markets have been so wild lately. Remember to stay cool, stick to your trading plan, and manage risk wisely.
We wish you a successful trading week on the Change App.
Until next week!
