Guide To Trading Eur/Usd (#1 Most Popular Forex Pair)
As the two largest and mostly commonly traded currencies in the world, the euro (EUR) and US dollar (USD) represent the highest proportion of trades made in international finance. Euro to USD (EUR/USD) trading occurs constantly and the pairing of the two is extremely popular; it's actually the most liquid currency pairing in the world. A large number of companies operate both within Europe and the Unites States, owning offices in both locations.
Fundament Aspects:
Reasons for trading and investing include: the vast amount of economic and financial data available on the EUR/USD exchange rate, the wide range of market participants and combination of volatility and liquidity in the EUR/USD market – all of which make trading this pair attractive to newcomers and veterans alike. Only existed since end of 20th century, EUR/USD has proven itself to be a powerhouse in modern forex trading.
This common currency for a large proportion of Europe quickly gained traction and became cemented as a market leader. Euro trading swiftly developed into a new and exciting financial opportunity. The dollar, of course, is far older, with roots stemming back to 1792 and the creation of the United States Constitution. Since that time, the dollar has grown considerably in strength and, paired with the euro, has become something of a global standard among investors and traders. The EUR/USD experienced large price swings as various economic and political events affected it.
Role of Euro: As interest rates play a major part in the moves of the EUR/USD exchange rate, it will come as no surprise that the European Central Bank (ECB) is one of the major institutions to which investors and traders will pay close attention when making decisions that might affect the future direction of this currency pair. The ECB releases monthly reports concerning interest rates and economic outlook, which are used by investors and traders as indicators about future policy direction and the effect these may have on the EUR/USD exchange rate. Wider economic data, such as consolidated employment numbers, can also impact the EUR/USD exchange rate and can be a vital source of information for traders.
Role of USD: As with its counterpart, the US dollar is influenced by its own central bank, the US Federal Reserve – often referred to as the Fed. The institution releases the Federal Funds rate and rate statements eight times a year, which can provide insight into the state of the US economy and impact the currency. In the US, the Bureau of Labor Statistics release Nonfarm Payroll numbers usually on the first Friday of every month. This is the US unemployment data and can often cause volatility in the EUR/USD pairing. It is closely watched by traders and investors around the world.
Why trade Eur/Usd? The exceptionally tight pricing for euro to USD means lower costs for traders. The high volume of trade in this pair make for a market with plenty of liquidity. Historically, the EURUSD market has seen some great trends over multiple time frames – another reason why traders are attracted to this foreign exchange pair. When To Trade? If day trading the EUR/USD, the times that are likely to be most active for the pair, on average, will be when exchanges in London and New York are open and overlapping (4 hours a day), before London session closes for the day.
Fundament Aspects:
Reasons for trading and investing include: the vast amount of economic and financial data available on the EUR/USD exchange rate, the wide range of market participants and combination of volatility and liquidity in the EUR/USD market – all of which make trading this pair attractive to newcomers and veterans alike. Only existed since end of 20th century, EUR/USD has proven itself to be a powerhouse in modern forex trading.
This common currency for a large proportion of Europe quickly gained traction and became cemented as a market leader. Euro trading swiftly developed into a new and exciting financial opportunity. The dollar, of course, is far older, with roots stemming back to 1792 and the creation of the United States Constitution. Since that time, the dollar has grown considerably in strength and, paired with the euro, has become something of a global standard among investors and traders. The EUR/USD experienced large price swings as various economic and political events affected it.
Role of Euro: As interest rates play a major part in the moves of the EUR/USD exchange rate, it will come as no surprise that the European Central Bank (ECB) is one of the major institutions to which investors and traders will pay close attention when making decisions that might affect the future direction of this currency pair. The ECB releases monthly reports concerning interest rates and economic outlook, which are used by investors and traders as indicators about future policy direction and the effect these may have on the EUR/USD exchange rate. Wider economic data, such as consolidated employment numbers, can also impact the EUR/USD exchange rate and can be a vital source of information for traders.
Role of USD: As with its counterpart, the US dollar is influenced by its own central bank, the US Federal Reserve – often referred to as the Fed. The institution releases the Federal Funds rate and rate statements eight times a year, which can provide insight into the state of the US economy and impact the currency. In the US, the Bureau of Labor Statistics release Nonfarm Payroll numbers usually on the first Friday of every month. This is the US unemployment data and can often cause volatility in the EUR/USD pairing. It is closely watched by traders and investors around the world.
Why trade Eur/Usd? The exceptionally tight pricing for euro to USD means lower costs for traders. The high volume of trade in this pair make for a market with plenty of liquidity. Historically, the EURUSD market has seen some great trends over multiple time frames – another reason why traders are attracted to this foreign exchange pair. When To Trade? If day trading the EUR/USD, the times that are likely to be most active for the pair, on average, will be when exchanges in London and New York are open and overlapping (4 hours a day), before London session closes for the day.