Euro Price Outlook: EUR/USD Rips as Markets Surge on Virus Stimulus. It appears that the GBP/USD has already dipped back to the lows seen following the US Presidential election, before Obama was re-elected. The market has been controlled and dictated by what the powers that be in the U.S. dictate, not the markets.
The EUR/USD has responded extremely well in response to this price outlook. Interestingly, with the markets reeling, a lot of brokers are selling or giving up their exposure in the markets.
Why would the EUR suffer such a reaction? Well, it appears the market is adjusting to Obama’s stimulus plan. This is something that the Fed would love to have happened right now, but for different reasons, the markets would not be as ready for such an event.
How about I.E.? All they do is print money? Where does the money come from?
Please consider this. One of the main motivators for the Federal Reserve to print money is to keep interest rates down. If you own Euros and the economy starts to decline, the interest rates will skyrocket, just like they did during the late 70’s, leading to inflation, which will cause the U.S. Dollar to depreciate (push the Euro higher).
This is why the European Central Bank, especially the European Central Bank, has wanted to keep the Euro down so the Dollar can appreciate. That is how the European Union is trying to improve their economies in their own interest.
They are being forced to acknowledge that the American economic situation is not helping them too much at this point. What is this going to mean for the markets? The trend seems to be this: as the U.S. Dollar strengthens, so will the Euro.
Are the markets anticipating a major downturn in the U.S. Economy? If you look at where the markets are today, the answer is “no”.
Big Data? Think on this.
I know you want the big data and answers, but, the markets do not operate that way. However, please consider this. If the European Union continues to print money, we can expect a sharp increase in the Euro, just like the markets predicted the North American Dollar would appreciate.
What if the Central Banks continues to print even more money? Will the markets correct the trend or will they continue to make profits for the power brokers?
The markets have made profit for the Power Brokers for many years, and they seem to be looking forward to making more profits with more central banks printing more money. The odds are in favor of printing more money. So, the question is, are you listening to the brokers or do you want to listen to the markets?