I was wondering.. if this makes sense...
Since the EUR is strong against the dollar... we have lately a value around 6.35 €per pip for a standard 100,000 units lot. With a EURUSD of 1.0000 a pip would be 10€ .. same as in dollars.... So since EURUSD is the most traded pair... I wonder if the high volatility we are having recently is also because we need more pips for the same € than before.
But more important than this curiosity...
Inflation in Europe worries but it is different from the inflation in US. Because the inflation in US also has the problem of the flow of USD to other currencies. I can see a difference of European inflation with a currency that is going stronger than inflation in US with a currency that is weakening. So.. I don't have an idea why the ECB is so determined and worried to fight inflation and the FED is still more worried about other things.... The only thing that comes to my mind is that it is a clear sign that they REALLY WANT a weak USD for some reason. External Debt? other reasons?
The power of EUR or USD is not only about the EURUSD ratio... but also the inflation of EUR and USD. I don't want a 2.0 EURUSD if the inflation in Europe is triple than in US for example. That's why ECB wants to fight inflation first. I wonder if someone has studies of relations between EURUSD ratios and inflations data to see where are we going. I also ask why inflation raises so much in Europe when the EURUSD is so strong. It should be less. Anyone knows what is really happening with inflations?
Where are we going?
Since the EUR is strong against the dollar... we have lately a value around 6.35 €per pip for a standard 100,000 units lot. With a EURUSD of 1.0000 a pip would be 10€ .. same as in dollars.... So since EURUSD is the most traded pair... I wonder if the high volatility we are having recently is also because we need more pips for the same € than before.
But more important than this curiosity...
Inflation in Europe worries but it is different from the inflation in US. Because the inflation in US also has the problem of the flow of USD to other currencies. I can see a difference of European inflation with a currency that is going stronger than inflation in US with a currency that is weakening. So.. I don't have an idea why the ECB is so determined and worried to fight inflation and the FED is still more worried about other things.... The only thing that comes to my mind is that it is a clear sign that they REALLY WANT a weak USD for some reason. External Debt? other reasons?
The power of EUR or USD is not only about the EURUSD ratio... but also the inflation of EUR and USD. I don't want a 2.0 EURUSD if the inflation in Europe is triple than in US for example. That's why ECB wants to fight inflation first. I wonder if someone has studies of relations between EURUSD ratios and inflations data to see where are we going. I also ask why inflation raises so much in Europe when the EURUSD is so strong. It should be less. Anyone knows what is really happening with inflations?
Where are we going?