This Currency Pair EUR/USD is the short form to describe the Euro compared to the U.S. dollars pair or cross between the currency of the European Union (EU) and the United States (USD). The currency pair identifies how many U.S. dollars (the quote currency) are required to purchase 1 euro (the base currency). Read More
EUR/USD retreats from 1.0950 amid caution ahead of US labor market data. The Eurozone HICP data is seen higher due to base effects. Eurozone bulls may find interest after further correction to […]
EUR/USD treads water near 1.0920 to retrace its recent losses. Traders may wait for confirmation as MACD indicates a potential shift to a downward trend for the pair. A break below 1.0900 could […]
EUR/USD regains positive traction on Wednesday and snaps a three-day losing streak. A modest USD downtick lends support ahead of the US macro data and FOMC minutes. A convincing break below the […]
EUR/USD pares gains amid upbeat US Dollar. German Unemployment Change reduced to 5K from 22K prior. The seasonally adjusted Unemployment Rate remained consistent at 5.9%. The improved US Treasury yields are reinforcing […]
EUR/USD stays calm after pulling back from recent highs as US Dollar improves. Euro advanced by 3.16% against the Greenback in the year 2023. DXY may be retested on the market’s bets […]
EUR/USD drifts lower to 1.1028 amid the rebound of the USD. EUR/USD maintains the bearish outlook above the key EMA; RSI indicator stands in bearish territory below the 50 midline. The key support […]
EUR/USD is holding steady in thin markets to wrap up the trading year. The Euro is set for a 3% gain against the US Dollar for the year. US data continues to […]
EUR/USD trades with modest gains near 1.1070 amid light trading volume. The hawkish remarks from the European Central Bank (ECB) boost the Euro against the USD. The markets anticipate the Federal Reserve […]
EUR/USD rises toward the major resistance at the 1.1150 level. Technical indicators suggest a bullish momentum to reach the psychological level of 1.1200. The psychological level of 1.1100 could act as key […]
EUR/USD trades with mild losses near 1.1037 amid light trading. The Federal Reserve’s favored inflation gauge, the Core PCE, grew 3.2% YoY, below the 3.3% expected. ECB’s Lagarde clarified that the ECB’s policy […]
What is the Currency Pair What is the Currency Pair: EUR/USD (Euro/U.S. Dollar)?
This Currency The EUR/USD pair is the abbreviated name of the euro compared to the U.S. dollar pair, or cross between both the currency of the European Union (EU) and the United States (USD). The currency pair indicates the amount of U.S. dollars (the quote currency) are required to buy 1 euro (the basis currency). The EUR/USD currency pairing is often referred to by trading "euro." The EUR/USD currency pair price is reported as 1 euro per U.S. dollar. For instance, if it is traded at 1.50, it will take 1.5 U.S. dollars to buy one euro.
The basics of currency Pair: EUR/USD (Euro/U.S. Dollar)
The EUR/USD currency pair is the most traded worldwide since it mixes the two largest economies around the globe. It is influenced by various factors that affect its value or the U.S. dollar concerning one another and other currencies. Because of this, the difference in interest rates among the European Central Bank (ECB) and the Federal Reserve (Fed) affects the value of these currencies they are compared.
In particular, if it is the case that the Fed is involved in market operations to increase the value of more U.S. dollars stronger, the value of the EUR/USD exchange may decline as a result of an increase in the value of that U.S. dollar compared to the euro. Similar to this, negative news regarding the EU economy could harm the prices of the EUR/USD currency pair. The news about the state debt crisis and the flood of immigrants across Italy and Greece led to a Euro selling, causing the exchange rate to plummet.
A Brief History of the Euro Currency
ehat introduced the Euro currency in 1992 due to the Maastricht Treaty. It was initially created as an accounting currency the year 1999. The euro was introduced on Jan. 1st, 2002. The euro was introduced to circulation within the member states of the EU, and, in the span of a few years, it was the official currency of the European Union and ultimately replaced the currencies of several countries that are members of the EU.
The euro is integrated and is the currency of a significant portion of European economies. This helps stabilize the exchange rate of currencies and reduce the volatility of all countries in the European Union. This also makes the euro among the top frequently traded currencies on the forex market, just behind the U.S. dollar.
As of March 26th, 2018, 19 of the member states in the European Union use the euro. As per the ECB, at the time of January 1st, 2017, more than EUR1 trillion were being circulated throughout the world.
The reading of a price chart for EUR/USD
Contrary to a price graph for an individual stock, the price indicated is directly an actual price for this stock. The price shown on a price chart of an exchange rate pair is the conversion rate for the currency pair. The directional indication is that of the currency used as the basis.
In the previous instance, traders took an extended position in the currency EUR/USD at 1.50. When the rate rises to 1.70, then the euro rises in strength (as shown by the graph of price) as well as in turn, the U.S. dollar weakens. It now takes $1.70 (more than dollars) to buy the same euro, making the dollar weaker and stronger.
But, it is essential to realize that the currency that is the basis of each pair of currencies is always fixed. It is one unit. So, the cause of the strength or weakness is not evident in the price. The EUR/USD exchange rate may rise because the euro is becoming stronger or the U.S. dollar is getting weaker. The result is an upward trend within the price (price) and an upwards movement on the price chart.
Participate Risk-Free with $100,000 of Virtual Cash
Test your trading skills by putting them to the test by using our Free Stock Simulator. You can compete against hundreds of Investopedia traders and trade your way to the top! Trade-in a virtual setting before you begin to risk your cash.
Learn trading strategies to practice to ensure that when you're ready, go into the real world so that when you're ready to go out on the market, you've got what you require.
