Why the euro buoyance against the dollar?

Euro buoyancy against dollarThis week has proved quite newsworthy for many forex traders. The last few days have been specifically highlighted by the continued buoyancy of the euro against the dollar.

There are several reasons that this has taken place. Or primary importance is the fact that investor sentiment has begun to look favourably upon the Eurozone.

Many astute traders have expressed their growing confidence that this multinational economy has been through the worst.

These feelings are bolstered by positive German industrial output data as well as increased solvency within many sovereign banks.

This, in turn, has caused many binary traders to look upon the euro as a safer investment than it has been in the past. Indeed, the euro itself has touched upon an eleven month high in relation to the dollar and some traders see this strength as a real indication of economic progress.

On the other side of the Atlantic, domestic concerns within the United States are set to further widen this gap. The economic figures recently released indicated a surprise downturn.

The economy shrunk during the fourth quarter of 2012 at an annualised rate of .1%. Many online traders were not expecting such gloomy figures and these, in turn, may signal a more bearish market for the dollar in the weeks and months to follow.

Binary traders may seek to take advantage of this widening gap and perhaps enter into short term ventures to capitalise on any inter-currency volatility. While this may appear risky to some, the all-or-none aspect of binary trading will allow online investors to profit from discreet directional movements.

As many see the euro continuing to gain momentum, a short to medium-term investment in this multinational currency may represent a real hedge against the volatility of the dollar.

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Wednesday, January 30th, 2013 USA, binary trading, europe, news

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