Guide to Trading Forex as Eurozone Risks Losing 4.5m Jobs

LONDON, July 11, 2012 /PRNewswire/ --

The United Nations has warned in a report that if current economic policies, aimed at austerity, do not change, the eurozone may lose 4.5 million jobs over the next four years.

The report published by the International Labour Organisation (ILO) today [Wednesday 11 July 2012] said that the loss of jobs would increase the risk of social unrest; eroding citizens confidence in their governments, the financial system, and the European institutions.

With this in mind - we ask, how will this affect investor confidence in the euro currency?

Below, we look at how you can trade the euro with the potential to profit - regardless of whether it rises or falls - with a City Index forex trading account.

Forex Trading Opportunities

The hard-hitting report, 'Eurozone job crisis: Trends and policy responses' by the ILO, states that by 'embracing a Eurozone growth strategy with jobs at its core', a recovery is still possible within a single-currency setting.

However, they add that in order to do achieve this, austerity approaches need to be 'abandoned' and countries must 'urgently reform their financial systems'.

As a forex trader, such harsh warnings can open up opportunities where investor confidence is lower.

For example, an implication of this report could see investors sell the euro as their confidence weakens in a possible recovery, following not only this latest report, but months of unrest across the eurozone.

How to Trade the Euro

Using this example, let us look at how to trade the EUR/USD currency pair in the event you expect the euro to depreciate (fall) against the US dollar.

Through the City Index forex trading platform - unlike in more traditional trading - you can take a position on a falling market by going short and selling.

When trading a currency pair, you are trading on the first currency in that pair against the second currency. In this example, that would be the euro against the US dollar.

In the event the market moves in your favour (falls), you will profit with every pip the euro depreciates against the US dollar.

However, if you are wrong and the market moves against you (rises), you will incur a loss for every pip the euro appreciates against the US dollar.

Alternatively, if you believe the euro will appreciate against the US dollar, you can go long and buy.

In the event the market moves in your favour, you will profit in line with every pip the euro appreciates.

However, if you are wrong and the market moves against you, you will incur a loss for every pip the euro depreciates.

Start Trading Forex

To start trading forex across a range of trading platforms - including mobile and tablets - you can apply for a forex trading account through the City Index website.

Read More Forex Trading Tips

If you found this article helpful, you may want to read more just like this. You can access a range of forex trading tips, guides and articles through the Forex Trading section of the City Index website.

About City Index:

Today more and more individual traders are discovering the benefits of derivatives, and many of them are discovering them through a City Index trading platform.

As a group, we transact in excess of 1.5 million trades every month in over 50 countries. We provide access to a wide range of instruments including margined foreign exchange, CFDs and, in the UK, financial spread betting.

We constantly look to improve the performance of our platforms and expand our range of services. The result is our customers benefit from innovative trading tools with transparent pricing, competitive spreads, and a high standard of customer support. Visit http://www.cityindex.co.uk for details.

Spread betting, CFD trading and forex trading are leveraged products which can result in losses greater than your initial deposit. Ensure you fully understand the risks.