Forex Investment and Currency Trading

On July 8, Eurozone finance ministers meet to set the final EUR/SKK conversion rate. The baseline assumption is that the central parity, now set at 30.1260, will be the final conversion rate. However, we do see a non-negligible possibility that the final rate will be set lower, possibly at 30.0. You can position for this with an option trade. On May 29, the EUR/SKK central parity was revalued by 15% to 30.126, as the Slovak and EU authorities opted for a strong conversion rate to combat inflation. The decision was prompted by a speculative rally that drove EUR/SKK down by 11.1% this year. Market sees the new parity as well-supported by fundamentals and risk is skewed to the EUR/SKK downside.