Trade Euro

Trading the Euro

All trading is done in pairs. The most commonly traded euro pair is the euro-dollar (EUR/USD).

Trading the Euro

1. If you Buys EUR/USD… You are...Buying euros and selling dollars… And you can profit if.. There is rise in the value of the euro versus dollar…

2. If you Sell EUR/USD… You are… Buying dollars and selling euros… And you can profit if.. There is rise in the value of the dollar versus euro.

How to tell if the Euro is going up or down?

A country’s currency becomes more valuable when there is:

1. Economic Growth

2. Political Stability

3. A Rising Interest Rate

Economic Growth

Investors want to be sure that they are investing in a solid economy that is achieving steady growth. When trading the EUR/USD, currency traders want to assess the strength of the European economy versus the US economy.

Investors watch:

US and European economic data: Data on employment, economic activity and consumer sentiment provide a measure US economic growth versus European growth.

Oil prices: The US is dependant on imported oil. If the price of oil goes up, the US has to pay more to buy it abroad, which can cause the dollar to lose value.

Economic Growth:-

1. If Oil prices rise It tends to be Bad for USD

2. If Rise in European exports It tends to be Good for EUR

3. If Fall in European economic growth It tends to be Bad for EUR

4. If Rise in US unemployment figures It tends to be Bad for USD

5. If Rise in US growth It tends to be Good for USD

Higher Interest Rates

Money tends to follow interest rates. If interest rates go up in Europe, money would flow in from all over the world to capitalize on these higher returns, pushing the price of the euro up. If interest rates go up in the US, then the US dollar will become more valuable.

To determine whether interest rates will soon go up, investors pay attention to economic inflation indicators as well as speeches by influential figures.

Investors figures:

Trichet: Head of the European Central Bank

Schroeder: Chancellor of Germany, Europe’s biggest economy

Ben Bernanke: Head of the US Federal Reserve bank.

Higher In Interest Rates

1. If US interest rates go up It tends to be Good for USD

2. If European interest rates go up It tends to be Good for EUR

3. If Ben Bernanke says inflation is high in the US It tends to be Good for USD

4. If Trichet says inflation is high in Europe It tends to be Good for EUR

5. If US Consumer Price Index (CPI) higher than expected It tends to be Good for USD

6. If European CPI higher than expected It tends to be Good for EUR

Political Stability

Election turmoil, changes of government, high unemployment and international conflict all make investors cautious to put their money in a given country.

Investors watch:

Major news events from Europe and the US

Political Stability

1. If There is internal tension in Europe It tends to be Bad for EUR

2. If There is geopolitical tension for the US/ terrorism It tends to be Bad for USD