The EUR/USD (Euro/US Dollar) consitutes one of the most traded currency pairs in the worldwide forex market. The EUR and USD represent the two largest global economies and consequently, any movement in the exchange rate affects global economic sentiment.
Like other major pairs, EUR/USD is affected by economic indicators including GDP, unemployment figures, inflation rates and central bank policies. When seeking opportunties, traders can analyse these indicators to gauge the strength of each currency and anticipate market movements.
Geopolitical events such as elections, trade policies and political tensions can also impact the EUR/USD exchange rate and cause significant fluctuations in the currency pair. The implications of Britain’s recent exit from the European Union for example, and its consequent tax reforms, have led to volatility in the forex market. By keeping a watch over these events, traders are able to make better judgements and adapt their strategies.
