Currency Corner: the US dollar could go a lot higher against the euro

Since the 2008 financial crisis, the euro has been in a steady decline against the US dollar. That's likely to continue, says Dominic Frisby. Here's how to make sure you're on the right side of the trade.

(Image credit: Classix)

For today’s Currency Corner, I wanted to find a pair with a trading signal we can act on right now. I looked high and low, surveying currencies as exotic as the Philippine peso, the Egyptian pound and the Hungarian forint, but most seem locked into well-established trends or ranges. To add a bit of excitement to today’s missive, I wanted something a bit more immediate. Lo and behold I found it in the first place I should have looked – the euro and the US dollar.

Here’s a great statistic for you: the US dollar makes up one side of 88% of global daily forex trades. When you consider how much bigger the forex markets are than the bond or stockmarkets, you realise what an extraordinarily large sum of money that is. The euro, meanwhile, makes up 32%. In third place is the Japanese yen on 17% (this all adds up to more than 100% because, of course, there are two sides to every currency trade).

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up
Dominic Frisby

Dominic Frisby (“mercurially witty” – the Spectator) is as far as we know the world’s only financial writer and comedian. He is the author of the popular newsletter the Flying Frisby and is MoneyWeek’s main commentator on gold, commodities, currencies and cryptocurrencies. He has also taken several of his shows to the Edinburgh Festival Fringe.

His books are Daylight Robbery - How Tax Changed our Past and Will Shape our Future; Bitcoin: the Future of Money? and Life After the State - Why We Don't Need Government

Dominic was educated at St Paul's School, Manchester University and the Webber-Douglas Academy Of Dramatic Art. You can follow him on X @dominicfrisby