Will Euro Reach Parity with US Dollar?

Jun 30, 2022

By The Small Exchange

Overview

Currencies are known to be less volatile assets than stocks or commodities, but the euro currently rests in a quite precarious position relative to the US dollar. Errol and Frank look at historical prices of the EUR/USD conversion rate to find the last time it traded at parity, and they look forward to options on the euro and USD to project the chances it gets back there by the end of 2022.

The guys find very rare cases for the euro to fall below $1 in the last 20 years, but they see that there's plenty of option premium in the strikes that would entail such a move. Are the $1 puts in the Euro FX Futures (6E) options a buy or sell? Should you be aiming for upside or downside in the Small US Dollar Futures (SFX)?

Contents

0:05 Will Euro Reach Parity with US Dollar?

0:40 It's Been a Rough Year for the Euro

3:00 EUR / USD is at 1.05

4:20 The Market is Close to 1:1

6:50 There's a 10% Chance is Breaks by August

7:15 You can Trade this Outlier using Small Options

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