EUR/USD

EUR/USD is the ticker used to represent the Euro and the US Dollar exchange rate on the forex markets. It is used to ascertain the value of the Euro against the US Dollar, telling traders how many Dollars are needed to buy a Euro. The Euro-Dollar is the most popular currency pair because its constituents represent the two largest and most influential economies in the world. Here you can see the pair’s interactive live price chart, learn about its history, and discover the factors that can influence the EUR/USD forecast.

What is the EUR/USD Currency Pair?

‘EUR’ is used to describe the Euro, the currency of the European Union (EU), while ‘USD’ represents the United States Dollar. The US Dollar is the most traded currency on the forex market, and the Euro is the second most traded currency. Combined, the Euro-Dollar is the most popular currency pair in the world, commanding nearly 23% of FX transactions according to the Bank of International Settlements.

The nickname given to the EUR/USD pair is ‘Fiber’, which is a play on the fact that the Euro is newer to the market than ‘Cable’ – the nickname given to the GBP/USD pair.

A Brief History of EUR/USD

Designed to facilitate cross-border trade between EU nations, the Euro was launched on December 31, 1998 at a rate of 1.1686 US Dollars. Initially a digital accounting currency, it entered circulation within 11 EU countries on January 1, 2002 and ended that day of trading at a rate of 0.8605 US Dollars. Its use has since expanded to include 19 of the 28 EU members, though UK is working towards leaving as an EU member.

EUR/USD rocketed from 0.8625 to 1.5830 between January 2002 and March 2008, in part due to an increase in trade between EU countries. However, it fell significantly as a result of the 2008 financial crisis – hitting 1.2674 in February 2009. The pair’s value fell further in the years that followed as liquidity for US Dollars tightened and EUR/USD fell to 1.0500 in early 2015.  Since then, Euro-Dollar has traded roughly between 1.0500 and 1.2500 (as of October 2018).

What Affects the EUR/USD Rate?

A number of elements can impact the EUR/USD forecast, including:

• Central Bank Monetary Policies: EUR/USD fluctuates based on shifts in the monetary policies set by the European Central Bank (ECB) and Federal Reserve, because these can affect the value of the Euro and US Dollar
• Economic Indicators: Any movement in European or US GDP (gross domestic product), CPI (consumer price index) or other economic indicators can impact the value of either the Euro or the US Dollar, which will affect the EUR/USD rate
• Politics: Political events that affect the EU and US economies, such as Brexit or Trump’s trade war, can cause the EUR/USD rate to rise or fall

It is important to remain up to date with any EUR/USD news that could influence the real-time price of the pair. For live analysis, view our news and technical analysis articles below.

Why is EUR/USD Attractive to Forex Traders?

The Euro-Dollar is attractive to forex traders because it offers high liquidity – a factor that often results in low spreads. It can also be a highly volatile pair, which creates opportunities for speculation.

In addition, because EUR/USD compares the values of the currencies used by the two largest economies in the world, there is a constant flow of economic and financial data available for traders to use to analyze their positions. 

Using the EUR/USD Chart

The popularity of EUR/USD among both forex beginners and professional traders makes it important to understand how to read the EUR/USD chart.

In any currency pair, the first currency listed – in this case the Euro – is the ‘base’ currency and the second is the ‘quote’ currency. The EUR/USD live rate shows how many quote currency units you receive for one base currency unit.  If the EUR/USD currency pair is trading at 1.2500, it means you would receive 1.25 dollars for each euro sold.

When you see the price increasing on the chart, it could mean one of three things. It could mean that the Euro is strengthening, that the US Dollar is weakening, or that both are happening simultaneously. Some traders will apply various forms of technical analysis to their charts to make EUR/USD forecasts. Whether you look at price patterns or fundamental news events, the chart can give you a sense of current trends.