Currency Pair: EUR/USD (Euro/U.S. Dollar)

Loading the player...

What is the 'Currency Pair: EUR/USD (Euro/U.S. Dollar) '

The Currency Pair: EUR/USDĀ is the abbreviation for the euro and U.S. dollar pair or cross for the currencies of the European Union (EU) and the United States (USD). The currency pair tells the reader how many U.S. dollars (the quote currency) are needed to purchase one euro (the base currency).

Trading the EUR/USD currency pair is also known as trading the "euro".

BREAKING DOWN 'Currency Pair: EUR/USD (Euro/U.S. Dollar) '

The value of the EUR/USD pair is quoted as 1 euro per x U.S. dollars. For example, if the pair is trading at 1.50 it means that it takes 1.5 U.S. dollars to buy 1 euro.

The EUR/USD is affected by factors that influence the value of the euro and/or the U.S. dollar in relation to each other and to other currencies. For this reason, the interest rate differential between the European Central Bank (ECB) and the Federal Reserve (Fed) will affect the value of these currencies when compared to each other. When the Fed intervenes in open market activities to make the U.S. dollar stronger, for example, the value of the EUR/USD cross could decline, due to a strengthening of the U.S. dollar compared to the euro.

The EUR/USD tends to have a negative correlation with the USD/CHF and a positive correlation to the GBP/USD currency pairs. This is due to the positive correlation of the euro, the Swiss franc and the British pound.

RELATED TERMS
  1. GBP/USD (British Pound/U.S. Dollar) ...

    The abbreviation for the British pound and U.S. dollar (GBP/USD) ...
  2. USD/JPY (U.S. Dollar/Japanese Yen) ...

    The abbreviation for the U.S. dollar and Japanese yen (USD/JPY) ...
  3. USD/CHF (U.S. Dollar/Swiss Franc) ...

    The abbreviation for the U.S. dollar and Swiss franc (USD/CHF) ...
  4. USD/CAD (U.S. Dollar/Canadian Dollar)

    The abbreviation for the U.S. dollar and Canadian dollar (USD/CAD) ...
  5. AUD/USD (Australian Dollar/U.S. ...

    The abbreviation for the Australian dollar and U.S. dollar (AUD/USD) ...
  6. Counter Currency

    The currency used as the reference or second currency in a currency ...
Related Articles
  1. Trading

    How Do You Make Money Trading Money?

    Making money in the foreign exchange market is a speculative process. You are betting that the value of one currency will increase relative to another.
  2. Trading

    Making Sense Of The EUR/CHF Relationship

    The strong correlation between EUR and CHF currency pairs is undeniable. Find out what it means for forex traders.
  3. Trading

    Top 5 Hardest-Hit Currencies

    The value of a country's currency is dependent on many factors that will cause it to fluctuate, relative to other world currencies.
  4. Trading

    4 Of The Most Popular Traded Currencies

    Every day, trillions of dollars trade in the forex market. Here are a few of the most popular currencies, and some characteristics for each.
  5. Markets

    Forex Currencies: The Four Major Pairs

    By Brian PerryIn forex trading, four major currency pairs are the most popular: EUR/USD: The euro and the U.S. dollar USD/JPY: The U.S. dollar and the Japanese yen GBP/USD: The British ...
  6. Investing

    Here's How You Calculate An Exchange Rate

    Struggling to get a grasp on exchange rates? Here's what you need to know.
  7. Trading

    Buying Euros as a Long-Term Investment: Risks and Rewards

    Learn about the potential risks and rewards of long term investing in the euro and the current status of the European Union's financial markets.
  8. Trading

    Drastic Currency Changes: What's The Cause?

    Currency fluctuations often defy logic. Learn the trends and factors that result in these movements.
  9. Trading

    What is an Indirect Quote?

    An indirect quote expresses the amount of foreign currency required to buy or sell one unit of the domestic currency in the foreign exchange markets.
  10. Trading

    Understanding The Spread in Retail Currency Exchange Rates

    Understanding how exchange rates are calculated and shopping around for the best rates may mitigate the effect of wide spreads in the retail forex market.
RELATED FAQS
  1. What is the value of one pip and why are they different between currency pairs?

    In forex markets, currency trading is done on some of the world's most powerful currencies. The major currencies traded are ... Read Answer >>
  2. Why is currency always quoted in pairs?

    When reading currency quotes, you have probably noticed that there is only a single quote for a pair of currencies. Currency ... Read Answer >>
  3. Why isn't the EUR/USD currency pair quoted as USD/EUR?

    In a currency pair, the first currency in the pair is called the base currency and the second is called the quote currency. ... Read Answer >>
  4. When and why did the euro make its debut as a currency?

    On January 1, 1999, the European Union introduced its new currency, the euro. Originally, the euro was an overarching currency ... Read Answer >>
  5. Is there a world currency? If so, what is it?

    There is no such thing as a world currency. However, since World War II, the dominant or reserve currency of the world has ... Read Answer >>
  6. Why doesn't England use the euro?

    Understand why the United Kingdom has opted to not join the eurozone in adopting the euro over the pound sterling as its ... Read Answer >>
Hot Definitions
  1. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  2. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  3. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  4. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  5. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  6. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
Trading Center