Forex Success

Since its public appearance in 2002, euro´s price has not stopped raising. The euro´s quote at the Forex market is one of the highest occurred in recent years.
Nobody would have imagined when it was created that one day this currency could overcome the American dollar, but the reality proved otherwise and in the year 2005, when the price of the euro touched the roof of USD1,19 in european markets.
By this time, the European Union is concerned about the euro, EU is at the of a recession, because the euro´s high price is reducing the export competitiveness. This overvaluation of the euro´s price benefits the imports, the country exporters and investors who bet their money in the foreign exchange market.
In Europe, companies are pressuring the authorities of the european Central Bank to lower interest rates and take away strength to the currency of the euro zone, however, Jean-Claude Trichet, ECB president, has refused to take this step.
A strong euro”is bad” for the whole economy, was the message given by the Federation of Employers of Germany. In this country, the most dynamic economy of the EU, the 10 biggest companies lost business for 10,000 million euros in the first quarter. The situation that the European Union regarding its currency is the faceoff of what’s happening in the United States since the mortgage crisis, when the Fed has decided to cut sharply the cost of money.
The situation that the euro is facing hurts some productive sectors but is beneficial for the currency market since its high quote allows the operator to obtain higher returns and higher profits. We´ll have to see what will happen in 2008 with the currency that had its best time in the late 2007 when it arrived to USD1,50 per euro.

During volatile times like nowadays is better to take precautions before moving at the foreign currency market. Consulting every technical analysis and filtering the fundamental papers is necessary but not sufficient. Due to the bad time that the currency exchange is experiencing, the investors are using non traditional methods as astrology to take into account which is the position and alignment of the planets before making any kind of currency exchange.
If you are a superstitious person that takes Astrology serious, remember that this is a tool that can be very useful when it comes to an exchange of currencies at the forex market.
In the United States there is a product called Astrologers Fund, which allows investors to make an astral chart of the market. This institution, established by Henry Weingarten, founder of the school of Astrology in New York, uses the psychology math based on Astrology to predict the behaviour of the indexes, currencies and raw materials.
The investor could exchange a currency not only using tools usual techniques, but also must rely on planetary movements, their position and alignment in order to anticipate market movements.

The risk aversion made the euro grow for several consecutive months. euro is nowadays weak, due to the international economics situation, which changed the investor´s point of view about the EU´s currency, changing their trust about the Euro as a strong currency. Nowadays, the risk aversion made the investors to be defensive, protecting their assets in the so called “safe currencies”, like the dollar or the yen.
Specialists are asking whether this drop of the euro is a crash, or is it simply a fall which in a short time will be a recovery. Some people believe that this drow will continue and other people think that a rise of the Euro is imminent.
After the debacle suffered by the dollar in late 2007, it has rebounded compared to other currencies. The international stock exchanges have been going down, which has incremented the risk aversion at the currency markets, which has been in favour of the yen and the dollar.
The euro today is at a crossroad because on the one hand it´s quote makes it an attractive currency at the currency market, despite that the beginning of 2008 wasn´t very good, and on the other hand the high cost is that the European currency is pressuring prices upward, resulting in a decline in purchasing power of the European population.
The actual weakness of the euro, and the rebound of other currencies has led investors to give support to the currencies that are rising up after a crisis period. It isn´t casual that several months ago, investors were desperately launched to invest their dividends in commodities (gold, wheat, corn), assets that are maintaining a steady increase in their quotes.

The end of the Bretton Woods treaty, resulted in the birth of the foreign exchange market and the free fluctuation of the exchange rate from the simple mechanism of supply and demand.
In the year 1973, during Richard Nixon´s presidency, there was a breakthrough in the international monetary system: The end of convertibility of the currency in relation to gold allowed currencies to be flexible and changeable to fluctuate freely according to market conditions.
Over the last thirty years, several events occured in the world that marked people’s lives. The end of the Cold War after the fall of the Berlin Wall in 1989, was the breakthrough that made the market definitely reign around the world.
The facts elapsed in the last times are one of the factors that determine economic policies. The foreign exchange market is not out, because the logic it´s immersed within this economically globalized world, and that is why it is affected by the decisions that are made in the centers of power.
Euro´s strength has been one of the great surprises in the currencies world, since few people expected it to reach the top of USD 1.50 per euro, but this happened and gave air to American businesses that export. The rise of the euro has helped to diminish the impact of the mortgage crisis in the United States and probably if the situation ontinues it will continue disminishing the impact.
Too many obstacles are impeding the recovery of the dollar, the first obstacle is that, by this time, the differential between the rate of the Fed (Federal Reserve) and the ECB (european Central Bank) no longer exists, now, the cost of money in the old continent exceeds the American one, and this is attractive to investors, which creates a greater demand for foreign currencies such as the euro.
The present situation was not consistent with what ocurred in early 2007 when interest rates were at 5.25% in USA and 3.25% across the Atlantic. Nowadays rates are at 3.25% in America and 4% in Europe, a situation that results in decreased interest on investments in dollars, and growth demand for currencies that were previously relegated due to the stability and performance that the American dollar used to have.

The interest rates drop is a constant in the major economies of the world. United States was the first country that inaugurated this method to avoid a recession affecting the productive sector, then England took the same course and reduced the cost of money to 5.25%, leading to a fall of the sterling pound.
The eurozone remains an exception to the rule and has been reluctant to take the same path as the United States and England, the president of the European Central Bank, Jean-Claude Trichet has refused more than once to take this measure, although the situation is pushing him to take the same path, due to the euro fall and the growing inflation that hits Europe.
Nowadays the principal international currencies are going through a crisis period and this reflects on the situation of the economies because the growth has stopped and the macroeconomic indicators are still throwing alarming figures. The curious thing is that despite the major economies indicators have been going down, the emerging countries are nowadays, the engine of the world economy.
This can be explained because the emerging economies are going through an exceptional situation due to the commodity prices (wheat, oil, corn) have increased and the demand of this products is in raising worldwide.
The emerging economies enjoy very good health, due to the fiscal stability that shields any turbulence, however the major economies recessions can affect the demand of raw materials, one of the pillars of the developing countries economic growth.
The impact of recession and the fall of the major international currencies can be seen in the daily customs of the common people.
A clear example of this is what is happening in New York City, where merchants display in their windows legends saying that they accept euros, something that no American could imagine a few years ago.
The modification in the exchange rates of the international currencies as a result of the crisis and not from a decision of the monetary authority, has revived some productive sectors and has led to a collapse of others. For example, the currency market was not maintained out of this situation, and the most common traded international currency pairs have suffered significant falls, it is curious is that there has been a resurgence of new combinations of international currencies that before were not so demanded by investors.