The EUR/USD Currency Pair (Euro / Dollar) is the exchange rate of the euro expressed in dollars. It expresses the value of one Euro in U.S. Dollar.
The EUR/USD pair is the most traded pair and represents 28% of the total number of transactions on the FOREX in 2010. It’s a reference on the Forex. Volatility has been about 160 pips between 2008 and 2010. This is a pair that fits to all investor profiles. Indeed, because of its relatively high volatility, it is possible to practice scalping but it is a also a pair in trend and we can play big upward and downward movements.
In addition, the EUR/USD is at the heart of the global economy because it put into competition two two lungs of the economy such as Europe and the United States. From a fundamental standpoint, this makes it possible to have a global vision of the economy.
Movements on the euro / dollar are driven by various economic announcements that occur throughout the day. The economic news on the EUR (Euro) are published most often in the morning and 11:00 (GMT+1) and at 14:30, it’s time for business news on the USD (U.S. Dollar).
Since its creation, the EUR/USD has ranged from $ 0.82, lowest in October 2000 and reached $ 1.60 in July 2008.
The pair EUR/USD is quoted in 4 decimal places but you can sometimes find 5 with some brokers. The exchange rate is floating and therefore subject to the law of supply and demand on the interbank forex market.
Both central banks linked to the pair Euro / US Dollar are the European Central Bank (ECB) for the EUR and the Federal Reserve (FED)for the USD. Both banks rarely intervene directly to change the exchange rate. Therefore, all decisions taken by these two central banks have a strong impact on the evolution of the EUR/USD (changing interest rates, asset buyback program ….)