|Member Sentiment Bearish|
Live and Historical EUR/USD Rates
The above chart represents the value of the Euro against the dollar - how many dollars are needed to purchase one Euro. At its introduction, the Euro fell against the dollar, but in 2003, the Euro surpassed the value of the dollar. Sometimes called "fiber" because of the transatlantic cable, this is certainly a major pair - the largest in forex trading.
Since its introduction in 1999, the Euro has become the currency of 21 European countries for a total of 327 million people. The Euro holds the highest volume of economic value circulated in any world currency and it is also the second largest reserve currency and second most traded, after the dollar. The Euro is controlled by the European Central Bank (ECB) in Frankfurt, though the bank has not typically exercised significant control. The Euro is strongly impacted by exports, as well as the primary industries in the Eurozone: services, agriculture, and tourism.
The U.S. Dollar
The U.S. dollar is the most common currency in international transactions, used both in the United States and several other countries. A number of currencies are also pegged to the dollar. The value of the dollar is strongly controlled by the Federal Reserve, which makes adjustments primarily through lending interest rates. However, it is a floating currency and value is apparent in consumer price indices or other major measures. The dollar is also the primary reserve currency, though in 2007, Alan Greenspan commented that it is entirely possible that the euro will replace the dollar in this role. Significant sectors in the American economy include energy, agriculture, manufacturing, and finance.
The EUR/USD pair is the most commonly traded major pair. Naturally, any factors that influence either economy affect the pair, as well as the differential between the interest rates at the ECB and Fed. The pair also has a negative correlation against the USD/CHF and a positive correlation with the GBP/USD pair. This is because of a strong positive correlation between the Euro and the Swiss franc or the British pound-a natural correlation given their close economic ties. It is not as common for this pair to be used for carries, since both currencies tend to be relatively stable.
Read about the tag team of Bernanke and Draghi here.
November 28, 2014 at 2:10 AM • Comment
We stated in our last report to our clients that "we still see bias for a roll back lower to the range and for a renewal of bearish extension pressures late this week, looking again for a cap...Read More
November 26, 2014 at 2:46 AM • Comment
A dip back lower into the range as expected on Tuesday as we repeat our stated view to our clients that "we still see a negative range theme into late November whilst capped by 1.1328".Read More
November 25, 2014 at 2:04 AM • Comment
A modest bounce effort Monday, but still very much defined by a sideways consolidation theme since mid-November, with recovery failures from modest 1.5725 and 1.5737/38 barriers.Read More
November 24, 2014 at 11:12 PM • Comment
*EUR/USD: Two Currencies Headed in Two Opposite Directions*Read More
November 24, 2014 at 10:59 PM • Comment
A far more aggressive sell off than we had anticipated Friday for a bearish outside weekly pattern to signal a bearish breakout from our 1.2631 and 1.2433 range.Read More