Trading the euro

Without a doubt, the Euro is the most traded currency on the Forex by the European traders including the French traders. A keen interest is normal as we are more subject to collect and interpret the economic information of the Euro zone if it concerns us directly.

However, throughout the world, the Euro is also very popular, especially in the form of the EUR/USD currency pair. Let us here take a particular look at trading the EUR/USD which alone accounts for almost 28% of the total transactions on the Forex.

This currency pair represents in fact an excellent way to trade the dollar because of its strong liquidity and the quantity of information one can find about its subject.

Investors who wish to anticipate movements in the Euro turn naturally towards the EUR/USD currency pair which is considered today as the best choice when it is a question of evaluating the real Euro value against the other currencies. For a better understanding of this principle, it is important to remember that when the Euro is associated to other currencies like the Yen or the Swiss Franc, it reflects the movements of these other currencies more than against the dollar.

The fact that the Euro has the particularity of being the currency of not only one country but a group of countries enables a large diffusion of economic information on its subject. In fact, each time an event occurs in one of these countries, either positive or negative, it is the entire zone which is then concerned. It is therefore of primary importance to be kept informed of current events throughout the Euro zone to trade well in the Euro.

We should note however that the Euro associated with the dollar is far more strongly influenced by the decisions and publications of the Fed than those coming directly from the Euro zone itself..

In addition, the behaviour of the Euro against the other currencies does not completely depend on the activity of the EUR/USD pair. Indeed, it is important to differentiate the various currency pairs and to establish your trading strategy according to the countering currency much more than according to simply the base currency. 

Because of its strong volatility and the interest from traders, the Euro is still a very interesting currency and very profitable on the foreign exchange market as long as it is handled in a knowledgeable manner. 

 

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