The Euro continues to hit record lows against the dollar. This week Euro was at a 12 year low vs. the dollar. A trend which signifies a dramatic slump for the currency. The trading pair almost has reach parity with dollar. Some investment houses such as Goldman Sachs believe that the Euro will reach parity with the dollar this year. Still, others believe the Euro/USD will continue to trend downwards with the Euro reaching as low as 95 cents against the dollar.
If you are one of the millions of binary traders who use this currency pair to earn your cash you should be following this relationship extremely closely. Reactions on both sides of the Atlantic could see massive fluctuations in price as US Federal Reserve Chair Janet Yellen analyses the actions of her counterparts in Europe.
Yellen had a meeting with the Senate Banking Committee to discuss her plans, which undoubtedly could impact the trade relationship between the two pairs. She said that the Federal Reserve can wait to raise interest rates and they are in no hurry.
There was discussion about an improving economy, which is growing but there were some disappointing numbers in labor force participation and wage growth. This is good news compared to a sluggish economy in Europe. The two opposite economic recoveries is playing a key role in the weak Euro. An especially interesting thing to watch for is how the central bank in Europe deals with an increasingly precarious Greece.
A quantitative easing plan is already in place to help mitigate the potential for fallout resulting from a Greek default and the havoc that will render on the single currency. Now, with the ever growing migrant crisis in that country, a stronger effort to prevent Greece from going under might need to be in place.
The main things you need to keep an eye out for when following the downward trend in the Euro against the dollar are how will the US Federal Reserve respond as well as how Europe deals with Greek debt and the greatest refugee crisis since World War 2.