A little history…
The Euro is a new currency that was born in 1999. It was created on the basis of the “European monetary unit” (European monetary unit), which replaced (abolished) the entire national currency of the countries of the European Union. Therefore, the peculiarity of Euro is that it is sensitive not only to the macroeconomics of the entire EU, but also to the individual economies of France and Germany.
It is the most popular currency pair in the world, representing the two largest economies in the world. The Euro It was created to facilitate international trade between European trading partners. The pair has seen significant fluctuations since its founding in 1999, driven by many global developments, such as the tech boom that led to the housing bubble and the European debt crisis.
The European Central Bank ( their issuance, supervision and monitoring activities, the statutes of the are responsible for maintaining the financial stability of the area Euro .) plays the role of issuer and regulator of the pan-European currency. The main pillar of its creation in 1998 is the banking system, based in Frankfurt am Main, and its Foundation was created with the participation of all the representatives of the EU countries. In addition to
More than a third of the total volume of transactions in the foreign exchange market is a pair of euros to the dollar.
This is due to the economic scale of the countries.
The base currency is Euro , the dollar is the quoted currency. In other words, the Euro-Dollar exchange rate shows how many dollars you will have to pay for a Euro .
If there is positive news out of the US and you are forecasting a rise in the dollar, then you should sell.
If you are forecasting the growth of European currencies against the Dollar, then you should buy quotes.
What factors does the exchange rate depend on? Euro of the dollar
The main factors contributing to the change in the price of the Euro-Dollar revolve around the monetary policy of the United States.
There are several levers that can help the Fed regulate and modify cash flows in various ways:
Interventions in the open market;
Increase or decrease of the discount rate;
Management of the level of reserve requirements.
The Federal Reserve Board can immediately change the terms of the reserve and the discount rate. By changing one of the three factors, the Fed affects the volume of funds and, ultimately, changes the real relationship of the dollar with other currencies (including the Euro ). Therefore, the Fed’s decision is a long-term priority factor for the currency pair of the Euro .
The main factor influencing the exchange rate Euro / Dollar is the Federal Reserve interest rate. This indicator represents the daily payment of interest on loans by credit institutions (banks). When it is necessary to harden or weaken the national currency, the financial regulators of the United States will change interest rates. Traditionally, these measures have had a significant impact on both the foreign exchange and stock markets.
Euro-Dollar exchange rate
The European Central Bank regulates the monetary policy of the EU countries. The main decision on the European exchange rate is taken by the Governing Council, made up of representatives of the national banks of the EU countries.
The main objective of the work ofis financial stability and respond fully to the effects of the 2008 global financial crisis.
The serious economic problems of all EU countries may have a negative impact on the exchange rate of the Euro . This is evident from the price dynamics of the Euro during the economic crises in Greece and Spain. Macroeconomic emissions are also a very important factor influencing the strengthening or weakening of the Euro .
The biggest news is from Germany. This is because Germany is the largest economy in the European Union. The most important information is the state of GDP, the theoretical and actual inflation rate, the rate of growth or decline in industrial production, and unemployment rates. It is important to take into account the deficit and the effectiveness of current measures to combat the economic recession.
There is a strong inverse correlation between the values of EUR/USD and USD/CHF which shows an approximate relationship between the euro and the franc. This is because the economic situation in Switzerland depends to a large extent on the economic and political development of the EU. In most cases, after the fall of the Euro against the dollar, the currency pair Euro / Franco falls immediately. Given the correlation between the British pound and the Euro the pound/dollar pair has a significant correlation.
Graphic Euro Dollar
To make money in euros and dollars, traders need some skills. Fast trading in 15 minutes or even 5 minutes can allow you to make significant profits.
The frequent volatility of this quote allows you to implement the most daring and risky trading strategies. A moving average or a combined indicator (for example, ) will be able to give a fairly accurate entry point. The exit of the position can traditionally be based on the breakout of the price channel. When using the chart for 1 day or more, the deviation and reversal of the position can also be based on the intersection of the moving average.
EUR/USD has a relatively small history, but in this short time the pair has fallen in love with many people.
High volatility creates many profit opportunities, but don’t forget about the risks.
The pair is dangerous for untrained traders.