When you’re discussing the different possible currencies to trade in the modern financial market, you’re thinking of the Dollar, the Pound, the Yuan, and the Euro. The latter currency represents one of the biggest coalitions of superpowers in the world, encompassing countries like Germany, France, Italy, and Spain. Not only does this mean that the Euro has significant backing through these major powers’ respective central banks, but you can expect a steady stream of usage to continue into the foreseeable future.
Quantitative Analysis: Lower Valuation Compared to Dollar
Now for the investor, it’s important to keep in tune with the latest developments on the world stage given how many territories the Euro touches. As of writing, the Euro stands at EUR 1.07 to the dollar, which is comparatively lower than recent peaks at 1.22 and 1.19 in 2020 and 2021.
The banks are aware of this relatively lower valuation and pitch it likely due to the strength of the dollar currently versus the relative instability that comes with the euro, with the British Pound facing similar lower values by comparison to the US currency.
Qualitative Analysis: Lots of News Spelling Different Views
There is always a myriad of issues that can be attributed to how a currency is specifically valued at any given time. Whether it is inflation, shifts in the political sphere, developments in international trade, or some other global phenomenon, factors such as these can have a wide-reaching effect on how a currency is used and traded.
It’s important, then, to focus on some of the bigger aspects that are likely to affect the trade of Euro. These include the ongoing Ukraine-Russia war that is likely to disrupt supply chains and international trade for quite some time. Though Macron’s recent victory in France to remain, president, has helped bolster the Euro somewhat, with some analysts expecting a further rise in trade value later in 2022.
The Euro will remain an intact currency many, many years from now. With many other countries staking their value on the currency (as well as others pegging their own home currency towards the Euro), it’s likely that the Euro will face further ups and downs in price but will remain relatively stable for the investor as a hedge against other currencies. If one were to invest in Euro, one could do so today at a relative dip compared to its historic performance against the dollar.
Note: Please do not invest money or assets in the financial markets that you cannot afford to lose. This article should not be construed to be investment advice and is for information purposes only