Currency speculation question?

Question

I want to do some investing, what pitfalls are there in the following type of currency maket investing?

I will use 10,000 euro and buy dollars with this at the current exchange rate off about 1.55. When the dollar gains or the Euro weakens, to a rate of 1.3 I will sell the dollars and buy Euro thus making a profit.

What problems are there with this apart from the commission the bank will charge me?

Answer 1

well one thing is the unstable markets in a global sclae economy, due to the obvious reasons.

From time to time, significant events can occur that disrupt the normal operations of financial markets. Examples are failure of a major financial institution, war or a major political event. Movements in exchange rates could result in financial loss to holders of foreign currencies.

you then also have to just in your immediat efactor in what percentages you ar epaying in fees and commisions,

you really have to look into is the profit margin viable for the time against cost.

in the scheme of it you are going to be playing a fairly low yield market in your chosen currencies.

Good luck to you.

Answer 2

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