Euro vs. USD - Two giants in one Pair

Undeniably, Euro vs U.S. Dollar (USD) currency pair has the biggest name in the world foreign exchange enterprise. Why so? 

Euro and USD currencies circulate in countries included in the list of the planet’s largest economies at present. Evidently, these currencies are today’s global financial giants. 

To realize the significance of the Euro vs. USD pair, let us take a brief walk on the assets of each of these universal titans. 

The Euro 

Euro (€) is the official currency circulating in 19 out of 28 European Union (EU) member states collectively called Eurozone. This, second most traded currency after USD, is used by almost 338.6 million people daily. 

Surpassing the US dollar in amount, the Euro currently has more than €1.1 trillion in circulation, making it top the most combined values of banknotes and coins on flow. 

The US dollar 

Without a doubt, USD is the world’s most dominant currency. It is the official currency of the United States and the insular territories according to the United States Constitution. 

USD is also considered the globe’s major reserve currency. Europe, Asia and Africa keep a solid dollar reserve to protect their states against inflation instead of stockpiling gold and silver. 

The two currencies as a pair 

Given the aforementioned attributes of these currencies, the Euro vs. USD currency pair (usually referred to as EUR/USD) is currently the most traded forex enterprise. Several large corporations lay the foundation of their businesses on both of them due to the pair’s multinational nature. Its flexibility and reliability attracts the largest number of forex traders. 

Euro vs. USD pair basically indicates how many US dollars are required to purchase a single euro, which is considered the pair’s base currency. This means that the value of the EUR/USD is quoted as amount of USD per one EUR. 

Since Euro vs. USD has a fixed base currency and represents one unit, these paired currencies’ source of strengthening and weakening is not reflected in the rate. If the euro gets stronger and USD on the contrary, the rate will still increase. Either flow of any of them results in the upward rate movement (price) and a complementary progress in a price chart. 

Although EUR/USD hit one of its lowest point of the daily average range in 2014, the last year has seen a great gain for the pair.

Source link   Presented by GMOTrading

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