Binary option buyers being interested in the currency market currently have many chances of profitable speculations. The news concerning this topic provide much scope for upward and downward price movements. In addition, this applies to a number of different currency pairs. All in all, this is an excellent situation for these security papers. The great advantage compared to traditional forex-trading is the fact that binary options cannot be levered. So, you already know in advance how high the potential risk is and you cannot lose more than the buying price of the option.
Great chances of high returns
The development of the euro in the current week is a good example for the excited mood on the currency market. According to an announcement of the seven greatest industrial countries of the world (G7) it took a roller coaster ride on Tuesday alone. First, the euro strongly increased compared to the US-dollar before he had to gave up all its gains again. Before the end of the trading the common currency recovered again and -with 1.3450 US-dollars- cost about one cent more than on its lowest level of the day.
This example shows how great the chances are at the moment, especially with particularly short run time binary options.
Investors who study the developments of the exchange rates in detail and who want to invest in binary options in the short term, have great chances of high returns. This applies to both increasing and decreasing prices- for traders, it merely matters to have the right instinct and correctly predict the price movements.
Japanese economy starts recovering
Why there are unusually high fluctuations with exchange rates of a number of currencies cannot be easily explained. Especially, psychology plays a fundamental part since at the moment, it is not yet about concrete political measures or measures of the central bank. Primarily, announcements of the Japanese government were responsible for the mood. The cabinet of Tokyo had announced that the monetary policy should be very loose in the next months.
From the perspective of domestic policy, you can easily understand that both the monetary and the budgetary policy in Japan should concentrate on combating deflation and a slow economic growth. However, the yen has lost much in value against many other currencies in the next months which in turn affects Japan’s trading partners. Especially in the euro-zone, this could mean that the economic recovery gains traction more slowly than actually expected.
In their statement, the responsible persons of the G7 clarified relatively clearly that they tolerate the current policy of Japan. At the same time it is going to be observed in detail though. The Japanese government has not explicitly established as an objective to devalue the own currency and thus improve the competitiveness of the inland economy. So, you cannot speak of a “currency war” which some commentators have already declared. Moreover, the political measures and the ones of the ECB already show first effects. This is the reason why the Japanese central bank has already decided in January to double the inflation target to 2 percent.