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Forex: how to benefit from the dollar and euro movements

Forex: how to benefit from the dollar and euro movements

Forex: how to benefit from the dollar and euro movements

With the European Central Bank staying away from what appears to be the early stages of a currency war - following US Treasury Secretary Steve Mnuchin's comments in Davos - the Euro was able to surge above 1.2500 versus the US Dollar for the first time since December 2014.

The Eurozone countries enjoy the strongest economic growth in a decade. Speaking at the World Economic Forum in Davos, he talked down the currency by indicating that "a weaker dollar is good for us".

"Now, we have, as I said, downside risks relating primarily to geopolitical and especially foreign exchange markets".

Draghi said Thursday that recently volatility in the euro's exchange rate was "a source of uncertainty" that merited "monitoring".

ECB President Mario Draghi could use the press conference that follows the meeting to stress that the euro appreciation has been in excess of what is warranted by fundamentals, or to push back against rate hike expectations, the analysts said.

The German share price index, DAX board, is seen at the stock exchange in Frankfurt, Germany, January 24, 2018. With no change in monetary policy expected, the focus will primarily be on President Mario Draghi's press conference and particularly what the European Central Bank plans to do once the asset purchase program expires in September.

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Dabrowski and partner Mate Pavic of Croatia defeated Australians Alex Bolt and Lizette Cabrera 6-3, 7-5. Halep will play the victor of Saturday's later match between local hope Ashleigh Barty and Naomi Osaka.

The Dow Jones Industrial Average .DJI rose 140.67 points, or 0.54 percent, to end at 26,392.79, the S&P 500 .SPX gained 1.71 points, or 0.06 percent, to 2,839.25 and the Nasdaq Composite .IXIC dropped 3.90 points, or 0.05 percent, to 7,411.16. Combined with the improved economic climate in the eurozone and the increasing confidence that inflation will rise, investors are bracing themselves for warnings that bond buying will not be extended past September and even conversations around interest rate hikes next year.

The low over the past year has been just under $1.05, but this is now up from $1.20 at the end of 2017 and marks a high not seen since October of 2014.

Looking ahead to the rest of the day, we do not have any major news from the Eurozone but we have the advance GDP data from the USA which should bring in some volatility.

"Monetary policy will remain accommodative. interest rates will remain low well beyond the end of (QE)". In fact, the recent appreciation of the Euro will exert more downward pressure on the inflation rate later in 2018, which means we expect cautious communication from the European Central Bank tomorrow. They may change their communication on the outlook for policy at the same time, according to a Bloomberg survey conducted before Thursday's meeting.

"By reaffirming his commitment to keeping Eurozone interest rates lower for longer, the clear - if undeclared - aim of Mr Draghi's dovish press conference was to keep the euro in check and prevent a strong single currency from hurting Europe's export boom".

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