Sunday, September 19, 2010

Euro Currency Analysis 2010 - Where is the Euro-Zone Currency Headed?

The Euro is the currency that's in the news these days with big problems in Greece and other Euro-zone countries. The market has turned volatile due to the Euro so this is a good time to provide some Euro predictions for 2010 and see where the EU currency is likely to be headed. Euro Currency Analysis 2010

As with any prediction, what I write here is my own opinion only. You can act on it or choose not to. I only offer what I believe to be true. However, back in January I wrote that I believed that the Euro will experience drops in value in 2010. So far, it seems I was right so I hope that this, more current prediction of the Euro, will also prove true.

Since January, the Euro is on a slipper road, going from 1.4000$ to lower then 1.2500$, something that was unimaginable just a few months ago. There are many euro predictions made by analysts that state that the European currency will continue to fall all the way to 1.1000$ and even lower. Some say it may even become lower than the American currency itself.

I happen to agree that the weakness of the Euro will continue throughout 2010. I don't like to say that it will reach this value or that one because such statements are usually inaccurate. However, I believe that the downward trend is the dominant one at the moment. Euro Currency Analysis 2010

Here is why I predict that the Euro will continue to go down in 2010 (or at least nor recover):

1. The US economy is still showing signs of improvement while those of the Euro-zone are showing weakness and uncertainty.

2. The political status of several European leaders is in doubt. The French and German leaders have weakened in local elections and in the polls.

3. While the trillion dollar bailout package the EU announced for Greece shows a resolve to bolster the Euro, it leaves a lot of room to fear that should bigger economies than Greece also falter that no money will be able to save them.

4. The lack of solidarity within the Euro-zone and the very different nature of the economies within it and the cultures of the various members have exposed the EU as an incohesive group that is not yet clear on its future. This leaves great doubt as to the future.

So, my prediction is that 2010 will continue to be a bleak year for the Euro. Euro Currency Analysis 2010

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Forex Euro Dollar Forecast - Where is the USD Headed?

Now that 2010 is well underway, it is time to start thinking about how the rest of the year will look like. In this article, I want to share my prediction for the US Dollar in 2010. As always, predictions are totally personal and this one is based on my opinion alone, so you need to make your own trading decisions.

That being said, I believe (and have stated before) that this is going to be a very good year for the USD. Indeed, the American currency finished 2009 on a high note and it has been going strong ever since, rising about 10% versus the Euro.

I predict that the USD still has some way to go and may indeed continue to rise in relation to various major and exotic currencies throughout the year. I base this prediction on the following:

1. It is very clear that Europe is in a mess. Greece is close to defaulting on its loans and there is still no clear plan of aid from the rest of the Eurobloc countries. Other members of the EU seem shaky as well, including Spain, Portugal, Italy, and Ireland. How will be big European countries be able to help all of their weaker members? This is partly why the Euro has weakened and why it may continue to weaken in relation to the Dollar. Forex Euro Dollar Forecast

2. Japan is also on shaky ground with an ever increasing deficit and other financial issues. Some say that the Yen will crumble sooner rather than later. This will also mean that the USD will rise in 2010.

3. It seems that the Health Reform Bill President Obama promises is stuck in Congress and will not pass in its current form. I am not taking any political stand here, but if a smaller bill is passed, the US deficit in coming years is likely to be smaller, or at least so the market will believe. This will give another boost to the USD.

4. The American economy seems to be recovering, albeit slowly, and there is even talk of a rise in interest rates. If these rates are indeed raised (and this does seem likely), then the US Dollar will certainly rise as it becomes more attractive to investors worldwide.

For all these reasons I predict that 2010 will be positive for the USD and that it will continue to be the global currency of choice. Forex Euro Dollar Forecast