Ashes to Ashes for EURUSD value, or are it’s Golden Years yet to come?

As 2015 heads into the middle of its second week, the Euro is languishing once again at almost parity with the US dollar, after a dramatic dip in values last week. Whilst Britain is not in the Eurozone, its presence as part of the European Union is indeed worth considering as a factor here. David […]

As 2015 heads into the middle of its second week, the Euro is languishing once again at almost parity with the US dollar, after a dramatic dip in values last week.

Whilst Britain is not in the Eurozone, its presence as part of the European Union is indeed worth considering as a factor here.

David Cameron yesterday began to show evidence that he, despite massive pressure from the British public, may be remembered as The Man Who Sold The World, having been quoted yesterday as saying that a “Brexit is not the right answer”, thus sewing seeds of doubt in the minds of economists and corporations alike that he will actually hold a referendum on European Union membership.

Bringing about Changes such as a potential exit from the European Union by Britain would perhaps place Mr. Cameron as one of the political Heroes, however the European economy is being so disproportionately propped up by Britain’s financial powerhouse in the City of London that Britain becoming fully independent of Europe would perhaps see the Euro plunge to lower levels than parity with the dollar.

Whilst many investors in Britain would perhaps be Dancing In The Street if Britain was freed from the shackles of European economic strife, it could be that Mr. Cameron fears the negative impact on the mainland European economy if the country over which he presides pulled out.

Where Are We Now?

Should a referendum be held and Britain’s member status of the EU is effectively Here Today, Gone Tomorrow, it may be a good time to trade the Euro against the Pound, as volatility would most likely ensue immediately, potentially providing an opportunity for The London Boys to make Day-In, Day-Out profit from the varying value of the Euro against the British Pound should the Pound immediately strengthen and the Euro immediately weaken.

Transatlantic traders would perhaps not need to Be Afraid Of Americans, because, as was predicted by many market analysts toward the end of last year, the US dollar is likely to remain the currency of choice because that will perhaps be the instrument which will hold a steady value whilst the Pound and Euro fluctuate, therefore allowing traders to use it as a benchmark as its value would be a Slow Burn as opposed to the potential volatility among European markets.

 

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Chart courtesy of Google Finance.

 

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