Why is the euro falling in price and what are its prospects?
While almost all Forex traders are scalpers, there are many players who prefer longer trades.
It is important for these traders to know the fundamental basis for the formation of the exchange rate, which will allow them to identify a long-term trend and determine its prospects.
One of the most popular currencies on the Forex market at the moment is the euro, its rate has been rapidly going down in recent months.
Whether there is a real reason for the depreciation of the euro or the trend was formed under the influence of panic, this factor is of decisive importance.
1. Migrants are one of the reasons why the euro currency began to lose its position; it is necessary to allocate money to support refugees, which could go into the economy.
2. Greece – it would seem that a crisis in one particular country should not harm the economy of the European Union as a whole. But the crisis in Greece has already cost 173 billion euros, a fairly significant amount even for the European Union.
3. Brexit - Great Britain leaves the European Union, and as you know, this is one of the most significant payers.
4. Investment outflow - in 2016, capital outflow from the Eurozone amounted to almost 500 billion euros. In fact, this is a record figure since the introduction of the euro currency.
Gradually, the reasons that caused the downward trend are fading away:
The problem with migrants remains, but is no longer so frightening, the situation in Syria is stabilizing, the flow of refugees is decreasing.
In addition, the leadership of the European Union countries will continue to tighten the requirements for obtaining refugee status.
Greece showed GDP growth of 0.1% in 2016, and in 2017 it is planned to jump this important indicator to 2.5%.
Great Britain itself is frightened by its decision, the question of leaving is still hanging in the air, but even with the final decision, Britain will pay contributions to the European Union fund.
The outflow of investment - nothing definite can be said here; the situation will begin to change after European indices begin to grow. And the probability of their growth is quite high.
That is, you should not expect that the euro will continue to fall in price in the long term; most likely, its exchange rate against the US dollar will remain at around 1.02-1.04 dollars per euro. With high probability uptrend.