MarketWatch  9 hrs ago  Comment 
Fillon stays in French presidential race despite summons for embezzlement charge
Benzinga  11 hrs ago  Comment 
EUR/USD is trading at 1.0542, down 0.0026. Markit's Italian manufacturing PMI for February (purchasing managers survey) rose to 55 from 53 in January. Italy's National Institute of Statistics (ISTAT) is scheduled to release unemployment data...
Benzinga  Feb 28  Comment 
EUR/USD is trading at 1.0594, up 0.0010. The pair is trading a little under the session highs. Chatter about European headline news is making the rounds. The French National Statistics Institute of Statistics and Economic studies (INSEE)...
Benzinga  Feb 27  Comment 
EUR/USD is trading at 1.0578, up 0.0020. The pair is trading a little under the session highs. Market talk about weekend global headline news is making the rounds. Spain's National Statistics Institute (INE) reported that Spanish business...
Benzinga  Feb 24  Comment 
EUR/USD is trading at 1.0568, down 0.0002. The pair is trading at the session lows. Chatter about European headline news is making the rounds. France's labor ministry (DARES) reported the number of people registered as out of work in...
Benzinga  Feb 24  Comment 
EUR/USD is trading at 1.0580, down 0.0003. The pair is trading choppy and some early session gains have been erased. Chatter about European headline news and global money flows is making the rounds. France's labor ministry ( DARES ) is...
Benzinga  Feb 24  Comment 
EUR/USD is trading at 1.0593, up 0.0009. Italy's National Institute of Statistics (ISTAT) reported that December Italian Industrial orders rose 2.8 percent after rising 1.7 percent in November. Year over year Italy's industrial orders fell 0.9...
Benzinga  Feb 24  Comment 
EUR/USD is trading at 1.0592, up 0.0008. The pair is trading a little under the session highs. Market talk about money flows and comments from various policy makers has kept both buyers and sellers active in a narrow range. The French...


The EUR/USD currency pair specifies how many U.S. Dollars are needed to purchase 1 Euro. In other words, the value of this currency pair is quoted as 1 Euro per x U.S. Dollars.

Trading the EUR/USD currency pair is also known as trading the "euro".

February 2010

Those who actively trade forex know that both the Euro and the U.S. Dollar have come under pressure lately for various reasons. In the case of the Euro, its weakness arises from sovereign debt concerns centered on Greece which have benefited the Dollar.

Nevertheless, the Greenback has suffered because of record budget deficits, two wars, massive unemployment and a sub-prime mortgage real estate disaster. The European Union also faces a considerable amount of economic pressure, having achieved almost no growth during 2009 and also suffering from very high unemployment levels beyond 10%. The current tug-of-war between the Euro and the Greenback seems to fluctuate depending on whether forex traders are more concerned with some of the Eurozone member nations having sovereign debt problems, or with the precarious economic recovery in the United States. As of this writing, the Greenback seems to be winning, especially after a recent surprise move by the Federal Reserve to tighten the Discount rate by 25 bps to 0.75%.

Also, the United States economic numbers have been slowly improving, with consumer spending showing improvement in January, rising by 0.5% from the previous month with November and December’s figures also adjusted upwards. In addition, U.S. GDP is now expected to surpass 3.5% this year, and Core Retail Sales rose by almost 6% annually for the last six months. The U.S. stock market has also maintained a surprisingly resilient level above 10,000, despite many corporations having difficulty turning a profit.

Nevertheless, although the United States is mired in debt with a budget deficit over a trillion dollars this year, and more than that foreseen for next year, the fact that the trade deficit rose to $40.2 billion in December, up from $36.4 billion in November, confirms that the economic expansion, although gradual, is now under way. The Federal Reserve is also expected to begin tightening interest rates further if economic numbers keep improving.

The European Union, on the other hand, has some extremely sensitive issues surrounding the debt of its member nations Greece, Ireland, Portugal and Spain, who all have now had their debt downgraded by S&P and other credit rating agencies. Despite numerous efforts from other Eurozone countries like France and Germany, who have both pledged to bail out Greece, a clear solution to the sovereign debt problems of these member states has still not been worked out.

The EUR/USD currency pair has also seen an impressive amount of volatility since the beginning of the year, with the Euro now down more than 2% against the Greenback on the year and still making new yearly lows within its recent decline. The rate appears to be stabilizing, however, as the Dollar begins to show signs of consolidation.

Furthermore, with commodities such as gold and oil trending higher, both currencies stand to fall under some pressure as net importers. Still, the U.S. Dollar seems to be benefiting from better-than-expected economic numbers, and despite China liquidating over $34.2 billion of their U.S. Government-backed securities in December, the Dollar seems to be weathering that particular storm rather well.

Which currency will end the year stronger is still anybody’s guess. Nevertheless, if the European Union’s sovereign debt problems fail to get resolved, the U.S. Dollar may appreciate more, especially given the Federal Reserve’s recent surprise move.

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