The fact
is that the euro and U.S. dollar are the world's two largest currencies, and
representing the world's two largest economic and is the most trades pair in
the world.
EUR/USD Facts
The
United States and the European Union are the two largest economic powers in the
world.
The U.S.
dollar is both the world's most heavily traded and most widely held currency.
The euro
is the world's second most popular currency.
And
since it contains the two most popular currencies in the world, the EUR/USD
pair is forex's most actively traded currency pair.
Interest rates
When
U.S. interest rates are higher than those of key European economies, the dollar
generally strengthens. When eurozone interest rates are higher, the dollar
usually weakens.
Employment Numbers
After
interest rates, employment numbers are of significant importance to EUR/USD
analysis.
Employment
Change released by the Bureau of Labor Statistics on the first Friday after the
end of the month makes up one of the most important releases in the forex
market.
Other
important U.S. employment numbers include Initial Jobless Claims which come out
every Thursday.
Important
employment numbers for the Eurozone consist of the Employment numbers for the
Eurozone’s major economies such as Germany and France, as well as the
consolidated numbers for the Eurozone.
Trading the EUR/USD
Because
the euro/U.S. dollar is such a popular currency pair, buying and selling
opportunities are almost impossible to find. However, forex traders still love
the pair.
Price
movements of this currency pair are generally related to factors that influence
the value of either the EUR or the USD.
As the
world’s most liquid currency pair, the EUR/USD offers tight spreads and
constant liquidity for traders who are looking to instantly buy or sell.
The
combination of stability and volatility makes the EUR/USD an excellent pair for
beginner and advanced traders.
The
relative strength of the US economy and the European economy, which can be
tracked through the daily news, generally influence this pair.
But keep
in mind that it is always necessary to understand the role of risk management
when trading currencies or any other kind of instruments.
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