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 regains the smile and reverses Wednesday’s decline. Extra recovery could see the monthly high around 1.0640 revisited. EUR/USD held weekly choppiness well and now recovers the 1.0570 region after Wednesday’s daily […]
The EUR/USD is climbing for Tuesday after risk appetite in the broader markets returns. A clean beat for US Retail Sales figures is seeing investor sentiment improve, taking the USD lower. The […]
EUR/USD reverses two daily drops in a row and revisits 1.0550. The surpass of 1.0600 should open the door to extra gains. EUR/USD separated two consecutive daily pullbacks and retested the 1.0500 […]
EUR/USD falls back from 20-DEMA as the risk-aversion theme strengthens. The US Dollar appeal improves due to some increment in the odds of one more interest rate increase from the Fed. The […]
EUR/USD revisits the area above 1.0600 once again on Tuesday. The continuation of the rebound should target the 1.0620 area. EUR/USD stabilized again after Monday’s pessimism and crossed the 1.0600 barrier. If […]
EUR/USD retreats from over a one-week high amid reviving demand for the safe-haven USD. The technical setup still favours bearish traders and supports prospects for a further decline. Any strength beyond 1.0600 […]
USD/CHF trades lower near 1.0530 due to the upbeat US Dollar. The Palestine-Israel conflict could push the flow toward safe haven Greenback. Solid US NFP data bolsters the strength of the US Dollar […]
EUR/USD experiences downward pressure ahead of US data. ECB is expected to maintain its current interest rates; weighing on the Euro. Fed’s assertion on monetary policy is contributing to the strength in […]
EUR/USD sheds further ground and drops to new YTD lows. Next on the downside comes the round level of 1.0400. EUR/USD alternates gains with losses after bottoming out in new 2023 lows near […]
EUR/USD is seen consolidating in a narrow range through the Asian session on Monday. The formation of a downward-sloping channel on the daily chart favours bearish traders. A sustained strength beyond the […]
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.
