Currency Forex online trading: According to a Reuters.com report, the euro declined to its lowest level against the dollar in six weeks on 15th of May 2013, as data showing an unexpectedly large contraction of the euro zone economy raised expectations for more monetary easing by the European Central Bank.
While it has been the yen that currency Forex online trading has been focused on in recent days, the euro fell for a fifth straight session against the dollar. Data showed that Germany's economy has crept back into growth at the start of the year, but not by enough to stop the overall euro zone economy from contracting for a sixth straight quarter. France, meanwhile, slid into recession.
By contrast, the United States is showing signs of a recovery, underpinning expectations that the Federal Reserve may wind down its asset-purchasing program by the end of the year. Currency Forex online trading might make profit by trading the dollar against other currency pairs.
The dollar briefly pared gains after data showed manufacturing activity in New York State contracted unexpectedly in May as new orders and shipments of finished goods fell, but that was not enough to deflect the overall trend.
Inflation data showed that U.S. producer prices are recording their largest drop in three years for April, pointing to weak inflation pressures that should give the Fed latitude to keep monetary policy very accommodative. The improvement of the U.S economy can be a good sign for currency Forex online trading since the market will acquire liquidity.
European Central Bank officials have said they could ease monetary policy further, and perhaps even take the deposit rate – the level at which banks park their surplus cash with the central bank – below zero if the economy slowed.
A cut in the deposit rate would make holding Euros unattractive and could lead to a broad selloff.
Concerns about the euro zone's recession trumped positive news out of Greece, with 10-year Greek government bond yields tumbling to their lowest in nearly three years, one day after Fitch upgraded the country's sovereign credit ratings.
Separately, the International Monetary Fund's executive board approved a $1.3 billion, three-year loan to Cyprus on Wednesday, and part of a larger international bailout to help the Mediterranean country avoid defaulting on its debt.
Forex market is the biggest market in the world and the most liquid, even during economic crisis, currency Forex online trading never stops.