The Euro Lives a Little Longer
For investors getting their Eurozone’s mixed up with their European Unions, and their Free Trade Areas mixed up with their Economic Areas, the Eurozone is just a bunch of countries tied together by one currency (…the euro!). Unfortunately, ever since the Greek debt crisis a few years ago, the coinage has been about the only thing holding these countries together!
Feuds and frictions have been aplenty with investors having doubts about European stocks, but hold up! The Eurozone just agreed on some basic fiscal management, which investors are terrified had never been done before! We’re talking about a rainy-day budget that every country will contribute to, intended to keep money warm in case there’s another financial crash, which let’s face it, there will be. When Europe goes down the plughole, this budget will, in theory, keep the euro afloat, and the currency clique glued together.
One currency’s gain is always another’s loss, so traders playing the foreign exchange (Forex) game are watching events closely. With extra backing, the euro could claw back ground on the dollar.
This has also caught the attention of investors shopping abroad. You can buy ADR (American depository receipts) versions of stocks to keep things in Benjamins, but there’s no getting around the euro exposure. That could be a blessing! If the euro rises in value against your home currency, you can exchange it back again for more dollars, yen, pesos, or… bitcoins, when you cash out on your investment.
So, everyone should take a page out of the Eurozone’s book! No matter what, it’s always smart to have an emergency fund carved out. This particular fund is big news for Forex players. If you’re a believer in the European project, an impending slowdown in European markets could make for a juicy European investment opportunity. The ball’s in your court!