Focus on Euro Financial Crisis Now Shifted to Italy

Share Article

Tired of the Greek default situation, markets have switched to Italy for the next round of financial brinksmanship. InvestTechFX reports regarding the financial crisis, it’s affect on Greece, and how this can translate to Italy.

Forex Ecn

Forex Ecn

Fx Trading - The Wave Of The Future

The Italian Prime Minister, Silvio Berlusconi, seems poised to become the next scapegoat in the EU's ongoing melodrama over the ultimate fate of the euro currency and the economic and political turmoil it has caused in forex currency exchange markets. InvestTechFX experts explain that objective economists are quick to point out that situations of this sort are rarely the responsibility of one individual, but are instead the result of many year's worth of choosing immediate gratification with near total disregard for future consequences. Italy would seem to fit this description rather well.

Like all European economies, that of Italy would best be described by the adjective, developed, rather than, emerging. With economic growth mired in single digit percentages, and those percentages the subject of debate regarding their accuracy, Italian productivity has not expanded to the degree necessary to match spending, yet spending proceeds unabated via continued borrowing.

The significant difference between the situation with Italy and that with Greece, however, is that Italy, with the world's eighth largest economy by nominal GDP, represents almost 13% of the EU's total, as opposed to under 2% in the case of Greece, according to InvestTechFX experts.
While it should be obvious to anyone that changing governments is nothing but a symbolic gesture, it does seem to be the preferred method of late. All mature, developed economies share a similar predicament. Increased life expectancies combined with decreased birth rates have combined to produce populations where average age has increased. There are not enough younger people to provide the revenues to support older, non-productive individuals at the accustomed lifestyles that were possible when economies were emerging and experiencing double-digit percentage rate growth.

The solution, short of euthanasia, is simple to state, yet extremely difficult to implement: spending must be curtailed to a level below revenue. Experts at InvestTechFX explain that a coalition such as the EU requires consensus and cooperation amongst the members to ensure survival. That consensus and cooperation seems glaringly absent as the EU dominoes continue to teeter, one by one.

The seemingly never ending saga of the EU and the euro currency has a marked effect on fx trading. Traders who rely on news events to make trading decisions are rightly nervous while awaiting the latest developments, especially so after spending the last several weeks undergoing the same scenario with Greece.

The problem with using news events is that it is basically impossible to predict how currency exchange markets will react to any given news event. News that would seem totally negative to euro currency values can cause the euro to plummet in value, or if the news is not perceived by traders to be as negative as was anticipated, the euro can gain value. Between these two extremes of price movement is every conceivable variable. No wonder then that, for example, the euro has spent most of the year in a relatively narrow range against the dollar.

Technical traders, especially those utilizing a Online Forex Electronic Clearing Network (Forex ECN), seem to be enjoying the upper hand at the moment, particularly those that are willing to accept short time duration trades with small profit margins.

This type of trading can be very frustrating to most traders and requires a great deal of patience, as well as the technical analysis tools from a forex ECN broker that enables a reasonably realistic expectation of predicting the top of price channels for selling opportunities and the bottom of those channels for buying signals.

No trading strategy is infallible. If such a strategy existed, there would be no forex currency exchanges on which to speculate. Without traders who predict price movement inaccurately and lose money to those who were accurate, the forex market place would be limited to fx trading simply for the purpose of converting one currency to another. Such a market would have very limited liquidity, which is the benefit a forex ECN broker provides, that of matching the transaction orders of investors who believe the value of a currency will increase with the orders of other clients who believe that currency will decrease in value.

There are many such brokers that offer the advantages of an ECN trading environment to clients of all sizes. One of these is InvestTech FX. For more information about the benefits of using a Forex ECN broker to access the foreign currency exchange markets, visit their website at http://www.investtechfx.com.

###

Share article on social media or email:

View article via:

Pdf Print

Contact Author

ITFX
InvestTechFX
+1 800 569 5861
Email >
Visit website