The Condition in Europe
Countries like Greece, Spain and Italy were the hardest hit economies in Europe. However, external stimulus packages from banks have worked a lot to bring the European economy back on track. Though it cannot be said that the economy in the continent is in perfect shape, at least it is showing some signs of recovery that forex traders are trying to capitalize on.
The Rally of the Stocks
After many days the European stocks have shown some signs of improvement, thus helping forex traders have confidence on the market once more. Banco Santander SA and Inditex SA both gained on more than expected decline on unemployment rate in Spain. Italy’s biggest insurer Generali gained 1.2 percent to finish at 14.51 Euros and Scor, the largest insurer in France arrived at 22.86 Euros after rising 2.7 percent. The IBEX 35 Index in Spain added 1 percent to its overall value after it was reported that the unemployment rate in the country has dropped more than anticipated. The FTSE 100 in U.K. managed to add 0.5 percent while both the DAX in Germany and the CAC 40 in France added 0.1 percent. The Stoxx Europe 600 finished at 299.59 after adding 0.3 percent, thus erasing the loss that it incurred the previous day on the suspicion that the Fed could scale back the buying of bonds.
Forex Trader’s Opinion
Forex traders are quite happy at the performance of the market and are optimist that the condition would improve more in near future. Some even opine that the Stoxx 600 index would rise by as much as 12 percent by the end of 2013, which is likely to revolutionize the struggling economy of Europe. Traders are optimist about thye bullish trend in the European market and do not think that the underperformance of the U.S. economy would put a halt to the progress of the European economy.
Though at present the European market is full of optimism, there is no room for forex traders to be complacent. Instead, they have to keep a close watch on each and every development in the market as a sudden turn of events can offset the whole market.