The USD has lost the most ground against the EUR in the past 24 hours. EURUSD is trading at 1.16831 at the time of writing, up by 0.72% and a one month high for the pair. The cause of the EUR’s strength: The public address by the Christine Lagarde, head of the European Central Bank (ECB), playing down any fears of inflation. While Inflation in the Eurozone is at a 13-year high (3.4%), Lagarde and her ECB associates are not ready to drop the notion that inflation is transitory. The ECB want to see inflation above 2% over the medium term before considering rate hikes or taking a more hawkish tone.
Traders of CHF will remember in 2015, when the EUR flash-crashed by 20% against the CHF after the SNB scrapped its unofficial peg to the Euro. The Central Bank of Switzerland, the Swiss National Bank (SNB), is running very high on foreign reserve currency. It may seem that the only way for the CHF is up.
If you are after a volatile currency pair to sharpen your trading skill, it is hard to look past the GBPCAD. The pair is volatile enough for opportunities to be scoped out, yet with a smaller risk factor than some other more volatile pairs like the NZDJPY or AUDJPY, where dreaded slippages are more frequent. As shown in the above illustration, the pair hasn’t strayed far outside the 1.6800 to 1.7800 range since October 2019. However, within this range, the pair has exhibited a significant amount of volatility.
Has the AUD peaked in 2021? What things might we consider when evaluating where the AUD will move in July and beyond? Volatility has definitely subdued in the pair, as the worst of the pandemic is likely behind us. For the best part of 2021, the pair has consolidated between 0.7550 and 0.7900.
The markets are (possibly) set to be as choppy this week as much as they were last week. The choppiness could materialise as two major Central Banks of the world take the spotlight. On Tuesday, the US Central Bank will be evaluating their response to the pandemic before members of the Senate panel on Covid aid. On Wednesday, the BoE will report on the British economy and its respective monetary policy.
A theory: Elon Musk will hand Tesla Inc (NASDAQ: TSLA) over to a successor when Tesla can no longer generate much fanfare. At least, not as much as they currently do. This point in time will come once legacy car manufactures are firmly entrenched in the EV space. It is likely General Motors Company (NYSE: GM), Stellantis NV (BIT: STLA), and the dominant Asian brands will outcompete Tesla on price, range, and looks. Consequently, Tesla will be relegated to a periphery player. If legacy car brands convert their production to EV as fast as they say they will, I expect Musk will move on to his next project before 2030.