For each day June 25 through June 29 2018 explain the reaso

For each day, June 25 through June 29 , 2018 explain the reasons for the euro price movements include events from both Europe and the USA; 2. Summarize all of the major factors influencing currency price movements from June 25 through June 29; and 3. Forecast the July 31 , 2018 spot exchange rate for the euro. Provide defense for your forecast. The Euro vs them US Dollar: International Finance 06/22/2018 Close: 1.1656 06/25/2018: Open: 1.1656; Close: 1.1704; up; High 1.715; Low 1.1629 06/26/2018: Open: 1.1706; Close: 1.1649; down; High 1.1721; Low 1.1636 06/27/2018: Open: 1.1650; Close 1.1554; down; High 1.164; Low 1.1.542 06/28/2018: Open: 1.1555; Close 1.1569 up; High 1.1599; Low 1.1528 06/29/201: Open 1.1571; Close 1.1683

Solution

Reasons:

1. The dollar ($) has become the main destination for safe haven investors.

2. Trump’s antagonistic stance toward America’s trading partners, to the fact that the Fed is winding down quantitative easing earlier than its counterparts in Japan or Europe.

3. Brexit uncertainty is still swirling, as Theresa May tries to devise a customs deal which her cabinet can support (and which the EU will accept).

Major factors affecting currency fluctuations-

1. Euro moved above 1.170 handle over influence gained from Italy PM Conte commenting that his country has no plans to leave the Euro and mentioned his plans on new government’s tax cuts and higher welfare spending plan lifted Italian bond yields.

2. Euro surges broadly today on hope that there will finally be a point of convergence between European Union and the US to avoid a trade war on cars.

3. it’s also reported that Trump would agree to end the trade dispute on car if both EU and the US would drop all auto tariffs. And so its driving up the Euro.

Forecasts-

Euro gained some bullish support on last trading session of the month over updates from EU summit in which European leaders reached a deal on the thorny issue of migration after all night talks. The pair closed for the month in Euro’s favor at 1.168 handle with majority of month gaining momentum from news on geo-political events and trade war related proceedings rather than a macro data supported momentum. Moving forward immediate focus remains on US non-farm payroll data with no major releases in Euro zone and EURO is likely to decline further as trading session moves into month of July. Recent strength in Euro’s rally lacks fundamental support and USD remains strong on broader market as prospect of multiple rate hikes this year gives it an edge against common currency which as of now doesn’t have any rate hikes before summer of 2019 and current market provides lot of opportunity for traders with risk appetite supporting growth of US Greenback in long term.