The two largest economic powers in the world are indisputably the European Union and the United States of America. The dollar, also called Greenback, is the world’s most traded currency, as well as the most widely held, making the EUR / USD the most popular and traded currency pair. But there is more with Kodimax.
The Options for Liquidity
Due to its on-going state of liquidity, the pair offers very low spreads as the first choice of any trader seeking a profit from investing in the financial markets. Informed trading decisions and a wide array of trading strategies can be applied to this pair, due to the rich source of economic and financial data influencing the direction of its market price. Therefore, a lot of open opportunities to make huge financial profits arise from the ever-changing level of volatility this pair is characterized by.
The Right Direction
The direction of the EUR / USD trading market price is dictated by the comparative strength of these two major leading economies. Simply explained, if all remains stable and the American economy registers a rapid growth, it will cause the dollar to strengthen against a weaker Euro. The opposite is true if Eurozone experiences a growth of its economy, which will lead the Euro to a stronger state in comparison to the dollar which will weaken.
- One of the major influences in the change of relative strength is the level of interest rates. When the interest rates of the American currency are stronger than those of the key European economies, it accounts for a firm US currency against the Euro. If the interest rates on Euro are strong, the Dollar normally falls. Having said this, interest rates alone do not dictate the movement of the currency market prices.
The dynamics of the EUR / USD is highly dominated by the political instability of the Eurozone, as it is a widely recognized fact that the Eurozone is a test ground for economic and monetary policies. These are the EUR / USD trading features you need to know before investing in the most popular currency pair on the market.