QUOTE AND NEWS
Forex News  Aug 16  Comment 
The euro today recovered from the 14-month lows hit yesterday following the news that trade negotiations between China and the USA are set to resume later this month. The EUR/USD currency pair was also boosted by the release...
Yahoo  Aug 11  Comment 
The EUR/USD pair had an eventful Friday, breaking down not only below the psychologically and structurally important 1.15 level, but has also smashed through the 1.14 level after that. There are major contagion fears when it comes to Turkish banks...
Yahoo  Aug 1  Comment 
The EUR/USD pair has been very bullish during early trading on Tuesday, as we reached towards the 1.1750 level. There is also a descending trendline in this area, and I think it could continue to put bearish pressure on this market as we stay...
Forex News  Jul 27  Comment 
The EUR/USD currency pair opened today’s session with a bearish outlook given the dovish outlook painted by ECB President Mario Draghi yesterday, which led to a bearish ‘outside day.’ The currency pair was on a downtrend up...
Yahoo  Jul 25  Comment 
Based on the early price action, the direction of the EUR/USD the rest of the session on Wednesday will be determined by trader reaction to the 50% level at 1.1680. Essentially, look for the upside bias to strengthen on a sustained move over...
Yahoo  Jul 21  Comment 
The EUR/USD pair spent most of the week falling, but early during the Friday session in New York, President Donald Trump tweeted that he wanted to persuade the Federal Reserve to keep interest rates low. Ultimately, this caused a major surge in...
Forex News  Jul 20  Comment 
The EUR/USD currency pair today traded sideways following the resurgence of Italian political risks due to tensions within the coalition government. The currency pair’s losses were largely limited by the weaker US dollar following...
Yahoo  Jul 20  Comment 
The Euro rallied initially during the trading session on Thursday but then broke down through the vital 1.16 level during the US session. This is a very negative sign and suggests that we will eventually go looking to an even more significant...




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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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