Both the Maltese Lira and the Cypriot Pound will soon converge into the Euro | Forex Factory

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Both the Maltese Lira and the Cypriot Pound will soon converge into the Euro

  • #1
  • First Post: Oct 30, 2007 9:59am Oct 30, 2007 9:59am
trading on those 2 crosses will cease on November 2 so. how much will this effect the exhange rate in the currency market? is all this priced in the market already ?

revoke
  • #2
  • Oct 30, 2007 10:05am Oct 30, 2007 10:05am
I would think it would add power to the Euro, depending on how well off those countries are; wouldnt it? On the other side, if those countries are feeble, then it would, in turn, bring down the Euro. Am I right about this or no? This is just a guess, I dont really know.
I dream, therefore I become.
  • #3
  • Oct 30, 2007 10:48am Oct 30, 2007 10:48am
It depends on how they do it. The DKK has been pegged to the EUR at around 7.45 DKK for the past couple of years. The reason why is because the Danish government wanted to convert to the EUR, but the people voted down the referendum to switch currencies. I guess the peg is sort of a compromise. The government is still wanting to switch over, and many people think it's inevitable... just a matter of when.

If Malta and Cyprus just peg the currency like Denmark, it wouldn't affect the EUR at all. If they plan to fully convert, it probably won't move the EUR that much because they're much smaller economies and the big players (banks, multinationals) probably planned for it by now.
  • #4
  • Oct 30, 2007 12:08pm Oct 30, 2007 12:08pm
http://europa.eu/rapid/pressReleases...guiLanguage=fr


as i write above Cease trading on those pairs on november 02 2007 so there will def be liquidation on fx spot market


revoke
  • #5
  • Oct 30, 2007 6:30pm Oct 30, 2007 6:30pm
Quoting revoke
how much will this effect the exhange rate in the currency market?
I wont expect any effect on the particularly eurusd's intraday volatility, but in the long term this might be a sign of the strengthening of the economy of the united europe. then the strength of the economy will effect the longer term trend.
  • #6
  • Last Post: Nov 3, 2007 4:05pm Nov 3, 2007 4:05pm
i think there might be some fizical buying already, and some still to come,...then after they start to pay with euros it should go down,...in 14 days all will be over, and the euro will soar again,...headed to 1.66 in 2-3 years...and u were all right, it will have positive long term effect on euro,...but the trend needs to take a double breath, and that should be a sign for a short,...at both events,...at least from fundamental perspective,...
its just money
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