EUR USD, the most popular pair in the FX market

EUR USD has always had an almost perfect correlation with USD CHF, which means that fiber has almost always increased when the USD / CHF is down.

On the other hand, the EUR USD has always shown a positive correlation with GBP USD pair.

These correlations are almost perfect, and largely because the pairs share the US dollar, as well as the European heritage. However, correlations change, and traders must always trade them carefully, doing the necessary analysis.

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Trade on EUR USD

The EUR USD is the ticker of the exchange rate of the dollar of the euro in the currency market.

It is one of the major currencies of the forex, and because it represents the largest economies in the world, it is also the most liquid pair (and the most interesting for currency trading).

The EUR USD currency is the most liquid in the world. As a result, it offers traders always low spreads.

It is of interest to novice traders as well as professional traders, long-term investors or day traders, because of the unique combination of liquidity and volatility of the euro dollar.

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EUR USD Volatility

Like any other currency pair, the EUR USD represents the price of the base currency (euro) against the quotation currency (US dollar). Thus, when the price of EUR / USD rises, it means that the euro is strengthening against the US dollar; and when the price of the EUR USD falls, it means that the value of the euro declines relative to the US dollar.

The price of the eur usd is essentially the amount of dollars needed to acquire one euro.

So, for example, when the price of the EUR USD is 1.20, it means that to buy 1 euro, it would pay $ 1.20.

EUR USD Hystory

Because the EUR USD is the most popular currency pair in Forex trading, it’s hard to imagine that 20 years ago it was not there. The EUR USD has only existed since 1 January 1999, when the euro was born after the adoption of a single currency by 19 European countries.

The EUR EUR pair started with a value of 1.1795 and fell to a record level of 0.8225 in October 2000, with countries still adjusting to the common currency.

It began to appreciate as adoption spread and reached a record high of 1.6037 in July 2008 during the global financial crisis.

In financial circles, the euro-dollar pair is called fiber, while the other major pair, GBP / USD, is called cable. As the euro is much more recent, traders have decided to make an “improvement” of the old telecommunications cable between the United States and the United Kingdom, to a much more recent “Fiber” cable.

What makes EUR USD moving?

Interest rates are the main factor influencing the EUR USD. As such, the ECB (European Central Bank) and the Fed (US Federal Reserve Bank) are the main bodies that EUR USD traders follow to obtain a broader fundamental view of the pair.

The Fed releases the federal funds rate eight times a year, while the ECB does so on a monthly basis. Real rates are important, but also, traders pay attention to the accompanying rate reporting that provides an indication of the future political direction of the two most powerful central banks.

Employment figures also have a significant impact on the EUR USD pair.

In the United States, non-farm payroll numbers are published by the Bureau of Labor Statistics on the first Friday of each month, which usually provides a lot of volatility for the pair.

In Europe, consolidated employment figures for the region, as well as those of major economies, such as France and Germany, also have a significant impact on the EUR / USD price.

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