eur and usd

In this article we will talk about one of the most popular currency pairs – EUR/USD. The euro-dollar currency pair appeared on 7 of April, 1989. The initial EUR/USD rate was 1.0445 on that time. Currency pairs in forex market written by concatenating the ISO currency codes (ISO 4217) of the base currency and the counter currency, separating them with a slash character. Often the slash character is omitted. A widely traded currency pair is the relation of the euro against the US dollar, designated as EUR/USD. The quotation EUR/USD 1.2500 means that one euro is exchanged for 1.2500 US dollars. At this currency pair, EUR is the base currency and USD is the counter currency.

The most traded currency pairs in the world are called the Majors. They involve our currencies euro, US dollar and more, such as: Japanese yen, Pound sterling, Australian dollar, Canadian dollar, and the Swiss franc. This currency pairs held around 75% of all market operations on Forex market. The most popular currency pair is the EUR USD. After EUR USD, GBPUSD is the most popular and also the most volatile.

EUR USD is great for currency traders who are just starting out since he currency moves quite at a slow pace as compared to the other major pairs. Also, the EUR USD is correlated in a negative way to the USD/CHF & it is related to GBP/USD in a positive manner. Traders who actively work with the euro-dollar currency pair should be always aware of economic events in the USA and Eurozone. The pair adheres to the trend trading. Entering the market trader should estimate the current prices, draw a trend and find the historical levels of short trading prospect.

There are several good reasons to trade EUR USD. First of all, this is amongst the popular and widely traded pair across the globe in all markets, which helps the pair to provide liquidity that is needed to benefit from price changes. The EUR USD is in fact the most densely traded pair because the EUR – Euro and the United States Dollar – both are treated amongst the most liquid currencies as lot of trading is happening with these currencies being part of the pairs. This is indicative of the fact that a Forex trader can continue to invest substantial volume of the money in a position/trade. They can also withdraw a large amount of profit with a very small scale of the market movement.

Thee EUR USD currency pair has tight spread, which under most situations gets to receive higher spread quotation from Forex trading brokers because of the reason that this one is more impulsive and volatile. So, the biggest advantage of trading this pair EUR USD is that since it is a liquid pair a trader will be able to make bigger trades and will be paying smaller spreads.

Traders need to understand and keep an important point in mind before trading EUR USD – that the countries like Germany, France, Italy, and Spain are responsible for over 3/4th portion of the Eurozone’s GDP. Therefore, the economic news and statistics related to these countries, along with the USA impact forex trading outcomes and volatility in a huge way. The one simple rule about EUR/USD currency pair is the more volatility there is in the market, the more profit, one can make. Any news, whether it is good or bad has the power to create movement in the market which may prove to be good for some and not so good for others. And this is where opportunity lies for the trader; it is his best time to trade currencies, provided he has kept in mind and eyes open.

Here we want to describe some important and useful info about EURO and US dollar currencies.

EURO. It is the second largest currency to be in circulation after the US dollar. Ever since the time the Euro got introduced, it has gone to get acceptance and approval to become official currency for 16 countries that comprises the Eurozone in 2002 and in this case replaced national currencies of this 16 countries (Austria, Cyprus, Belgium, Finland, France, Germany, Greece, Luxembourg, Malta, Netherlands, Italy, Ireland, Portugal, Slovakia, Slovenia and Spain.) Euro is the second largest reserve currency after USD, and Eurozone is the second largest economic region, again second to the American economy.

The European countries not using the Euro include Denmark, Sweden, and the U.K. Euro is supervised and looked after by the European System of Central Banks, which includes European Central Bank, and central banks in Eurozone.

US Dollar. The currency of the American economy, and with time it has come to be the most reliable currency in the world. Despite efforts to tumble and displace the dollar, the recent economic downturn has clearly demonstrated the support that the US dollar enjoys and how it is a secured option for investors looking for a solid currency.

Economics is a complex subject and American Economics no less. To understand the dollar we would have to understand everything in detail – right from rise and fall in interest rates along with political pressures mounted by their structured labor groups.

What we have to understand is that finally the dollar’s maneuverings are about cause and effect. When we try and see the dollar from the business owners and public policy makers point of view, we will know why the USD price is very important for different people.

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