Currency trading brokers: Euro price is falling

Currency trading brokers have been facing the Euro slump. This is according to Reuters.com the Euro dropped to a six-week low against the dollar and is currently in a three-week trough against the yen during this February, 2013.  

This is in the wake of data showing a struggling euro zone economy and amid uncertainty ahead of Italy's election on the 24th of February.

Expectations that the U.S. Federal Reserve may stop providing monetary stimulus also helped the dollar gain broadly.
The euro zone Purchasing Managers Index- PMI activity data for February pointed to continued weakness in the euro zone; keeping alive chances of an interest rate cut by the European Central Bank in the coming months. Currency trading brokers might keep track of the situation to plan how to execute their trades to make some profit.
"The PMI news is not good and shows the euro zone is under economic duress and you add to the current uncertainty ahead of the Italian elections and we have a euro that is struggling to get ahead," said Matthew Lifson, senior trader and analyst at Cambridge Mercantile Group in Princeton, New Jersey.
Prospects about a fragmented parliament after Italy's national election could trigger a sell-off in the peripheral bond market and this could weigh on the euro.
The euro dropped around 0.8 percent to $1.3166, its lowest since Jan. 10, and well below a 15-month peak of $1.3711 reached on Feb. 1. The euro last traded at $1.3199, down 0.6 percent.
For those currency trading brokers that did not sell the euro before the price dropped, they might lose money.
It has now broken below support at $1.3310, the 38.2 percent retracement of its November-February rally, and its 55-day moving average at $1.3285. The losses leave it open for a test of the Jan. 10 low of around $1.3040.
Against the yen, the euro fell to 122.23 yen, its weakest since late January. It was last at 123.03, down 1 percent.
On the other hand, the USD dollar has gained value against most major currencies. Broad demand for the dollar helped push the U.S. currency to a one-month high against the Swiss franc of 0.9330 franc, and a four-month peak against the Australian dollar of US$1.0225. Also, the dollar stands to gain against currencies like the yen and the British pound. Both the Bank of Japan and the Bank of England are considering printing more money and expanding their balance sheets, driving down the value of their currencies.
The dollar has gained more than 7 percent against the yen while sterling lost 6 percent so far this year. 
All the fluctuations in the market represent an opportunity for currency trading brokers for making profit selling and buying currency in the correct moment, but for some others it can represent a possibility of losing money.

 

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