On Thursday the euro continued its 3 week decline against the dollar with investors nervous awaiting the results of a coalition government following weeks of intense negotiations.
The euro fell 0.2 percent to $1.1787, resulting in investors who had taken positions against the dollar who had bet it would fall in 2018 rushing to cover their positions, which helped to rally the dollar.
On Thursday fresh 10 year Treasury yields were at their highest since 2011 which also helped the dollar. Against the Japanese yen, the dollar was at a four month high trading up 0.3 percent at 110.70.
Italian Coalition Negotiations
The inconclusive election result in Italy has resulted in weeks of intense negotiations between the anti-establishment 5-Star Movement and the anti-immigrant League.
News reports say that they working on a draft coalition program in which they will ask for a 250 billion euro debt from the European Central Bank to be wiped off the slate.
Exit the Eurozone
Bothe the 5-Star Movement and the anti-immigrant League are seeking to exit the Eurozone rejecting the imposed budget limitations by Brussels. They are also looking to exit the Eurozone and renegotiate budgetary restrictions and regulation.
Markets are sceptical as to whether they will actually go through with the plan, playing down the political instability and the impact it will have on the euro zone.
According to analyst at City Index, Ken Odeluga who said that the sheer outlandishness has helped ease the concerns of investors a bit.
The political uncertainty in Italy is weighing on the Eurozone and the euro, which has slumped $1.24 over the past 3 weeks.
How can you actually use this and benefit from the unstable political situation in the Eurozone?
You can hedge your bets at 24option forex CFDs broker, which allows you to trade on the difference between a particular assets set starting value and the closing value. In addition, if your trade is not going in the intended direction you can buffer it by opening the equivalent in the opposite direction.
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Dollar Index Gains
If you look at the markets currently with the rally in the U.S. dollar and the Dollar Index gaining 0.1 percent to 93.502 together with the fall in the euro, it is a perfect trading environment.
What’s more, the sterling value also fell against the dollar and the euro to $1.35 and £1.144 respectively. Last month the sterling was trading at 8 cents higher against the dollar at $1.43.
What’s more with a huge choice of 150 underlying assets to choose from at 24option, you are not restricted to currency trading.
Oil Companies Also Benefiting
The recent fall in the pound sterling saw BP and Shell oil companies benefiting from the fall and were amongst the strongest risers.
The benefits of CFDs trading at 24option means you can trade commodities, stocks, indices, currency pairs and the most popular cryptocurrencies.