Euro Value Increases In Spite of Catalonia Issues. The ongoing worries surrounding the Catalonia region of Spain and its struggles to try and become an independent nation have produced concerns among those investing in the euro. But even with the uncertainty surrounding that region, the value of the euro continues to rise.
The euro went up to a one-week high amid the Catalonia issue. This comes as central banks are planning on meeting soon to discuss a stimulus plan that will work for the next couple of years.
The currency has risen in value when compared to what it was a week earlier. The currency is at $1.1846 in value. It is still less than the $1.20 that it had in the late part of September but it also marks a rise over the $1.17 value it had in mid-October.
There had been worries that the value of the euro would crash due to the ongoing strife in Catalonia. Some dips in the value of the currency occurred amid the crackdown on a vote for independence and the Spanish government refusing to accept any plans that Catalonia holds.
Central Bank Work
The European Central Bank made a declaration that the group would cut down its asset purchases by about a third, thus reducing the total it uses to €40 billion. This will start on October 26. This comes as the bank is aiming to keep a sense of stability in the local economy.
Government Actions
A key part of the rise in the euro’s value came from the Spanish government saying it would impose direct rule on the Catalonia area. The autonomy of Catalonia has been suspended as the leadership in that area threatened to issue a full declaration of independence. Spain’s added control over the region may help to keep the value of the euro in check.
American Impacts
Some changes to the American dollar have also impacted the rise of the euro. The dollar has been influenced by ongoing concerns about who the next leader of the Federal Reserve will be. There are also concerns in the United States over how the Japanese elections will go that are keeping the American dollar from being traded as well. This allows the euro to become a little more valuable when compared with that prominent currency.
Long-Term Rise
The euro has experienced a long-term increase in its value when compared with the American dollar. In January 2017, the euro was at around $1.05. The currency has since increased in value with it having gotten to around $1.20 for a brief period of time earlier in the year.
However, the euro is not as valuable as it was in 2014. There were some times in that year when the euro was close to $1.40 in value.
The developments over the euro are expected to be reviewed by investors to get an idea of whether the currency can continue the long-term growth it has experienced. The situation in Catalonia will also be monitored carefully as it could directly influence the value of the euro depending on what might happen in the region next.
Is it a good move to invest on Euros? What do you think?