Of all the currency pairs traded on the Forex, the EUR/USD seems to be the most favored. It accounts for more than 30 percent of the purchases and sales performed in a year’s time. This pair is in fact the preferred pair in futures and options transactions. The pair is not only influenced by what goes on in Europe but is affected by how investors view the U.S. economy.
Thus, all financial news leads to the fact that one of the Euro-zone’s countries will have an impact on the Euro. And in turn, this will change the prices of the pair. But make a note that whatever the U.S. Federal Reserve does or says has the biggest effect on the monetary units.
As you can probably see from studying historic charts, the Euro has gained in value against the Dollar for the past few years. A trend reversal did take place in 2008 decreasing by 23 percent. It then rose drastically towards the end of 2008, reaching close to the $1.50 mark. Analysts believe that investors will seek the safer haven currencies as long as there remains doubt on the welfare of the global economy.
Many Forex traders make money trading in currencies like the Euro exotics. Trading the EUR/JPY adds a certain touch of excitement since the cross can be quite a volatile pair. This was especially true from July 2007 through July 2008 after which the Bank of Japan intervened to increase the value of the Yen.
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