Its
all about the “carry trade.”
Currency investors often borrow in a currency with low interest rates to buy another with much higher interest rates, and pocket the difference, known as “carry.” The eurozone has some of the lowest interest rates in the world, making the euro a favorite for funding such trades—a role it has gradually wrested away from the dollar over the past two years.
The borrowed euros are typically used to fund bets in riskier markets. If risks rise in financial markets (as they did while Greek talks were deadlocked), investors tend to exit these bets. That causes the euro to rise as the borrowed money comes home.
But if risks fall, so does the euro.
So if final deal between Greece and its creditors is reached, then the Euro will fall; but if not, it will rise.
Frankly speaking I don’t care if it’s good news or not because I am making profits. I have been selling EUR/USD since last 3 weeks and I am so happy to tell you that I have made over 500 pips in last 2 weeks just at the opened time of market, I wish it could be so easy for ever to make money and I must say I also like to give credit to my broker OctaFX which provided me complete news about this happening, so I was able to trade!
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