Often the news of the day is important and can be very important for those who
want to be aware of what is going on in the market. It can be useful to look at the EURUSD chart to get a better understanding of what is going on. Fortunately, this is
a relatively simple task to do. The chart is easy to understand and it is a quick way to see what is going on with the currency pair.
During the past week, EUR/USD news has been rather choppy. It has traded between a level not seen in over five months and then regressed to parity. Despite this, the pair is still above its 50-day Moving average. If the pair holds above 1.0450, it may rebound in the near-term. However, bad news from the European economy can cause the EUR/USD to drop.
Inflation rates in the eurozone have increased rapidly, driving the European Central Bank to adopt a more hawkish stance. The ECB has pre-committed to interest rate hikes in July and September. ECB President Christine Lagarde told the European Parliament that inflation has not yet peaked.
In the US, consumer price index figures are expected to show that inflation continued to accelerate in January. The Federal Reserve has already raised interest rates by 25bps in March. However, if US inflation continues to rise, the Fed could be tempted to make an even more aggressive move when it meets in March. In the eurozone, unemployment is falling. The eurozone's unemployment rate dropped to 7.2% in November, the lowest rate since March 2020. The low unemployment rate opens the door to higher inflation. However, it's too early to know if higher inflation will be enough to avert recession in Europe.
Meanwhile, inflation in Germany remained close to the highs not seen since reunification. The inflation rate in Spain also showed a slowdown in price pressures. On the other hand, Russia's gas pipeline to the EU was shut down. In addition, the euro debt crisis continues to mount, inundating five countries.
The euro to US dollar exchange rate is up close to 5% since the start of November, on the back of a moderately improved economic outlook in the eurozone. The ECB is expected to raise interest rates by 50bps on December 15th, and economists predict that eurozone inflation will rise to 8.5% this year.
The euro to US dollar exchange rate has also gained on the speculation that the US Fed may slow its rate hikes. However, the US is in a stronger economic position.
Using the euro has become a popular strategy among international forex traders. It is one of the most liquid currency pairs, and it creates frequent opportunities for excellent short-term returns on the international forex market. However, the relative stability of the euro versus the dollar is dependent on the strength of the supporting economies.
The European Union is the world's largest economic region, accounting for almost a quarter of the global economy. Its GDP is estimated to be more than $13 trillion, more than the US's. Nonetheless, the euro has been on a rollercoaster ride in recent weeks, and it is not likely to end anytime soon.
The euro's performance over the last several months has been a bit of a surprise, especially since it was seen as the safe haven currency following the recent European debt crisis. While the euro has regained some of its lost ground, it is still at its lowest point since the end of the Russian-Ukraine conflict. Combined with soaring natural gas prices, the euro's value is now more closely tied to the energy market than it was a year ago.
The euro's performance against other major currencies has been more muted, but it is still on track to outperform the dollar. The euro is also now more closely correlated to the price of natural gas, and the reliance of major economies on Russian gas has left investors unnerved.
The euro is also being squeezed by double digit inflation in Germany. In fact, the euro's most impressive performance may be the smallest, most mundane thing you've seen in the last couple of months.
The ECB has taken a dovish approach to policymaking, keeping the euro in its lows. The central bank has increased its gold reserves by 32 tonnes. It has also boosted its bond purchases by a quarter of a trillion dollars.
However, the euro is still under pressure from its weakest competitor, the yen, which has gained ground on the euro. Despite the yen's recent gains, the euro still remains the cheapest of the major reserve currencies.
Traders should be on the lookout for any USD/JPY news that indicates a potential shift in the Bank of Japan's monetary policy. BoJ Governor Haruhiko Kuroda recently said that the central bank would stick to its policy of aggressive monetary easing. This stance has continued to depreciate the yen. It has fallen more than a fifth against the US dollar this year, hitting a record low earlier this week.
The US dollar is considered the world's most important reserve currency. The US economy has been tightening monetary policy in response to rising inflation. However, recent numbers suggest inflation is on its way down and will likely peak in the near future.
The Bank of Japan's dovish stance has undermined the yen's value. The Bank has set a 10-year rate target at 0%. During periods of uncertainty, yen is considered a safer currency to hold.
The yen has been weakening since the start of the year, as the US and other economies are tightening their monetary policies. Amid this, investors are looking for opportunities to buy the US dollar. This creates the need for carry trades, which involve selling lower-yielding currencies to purchase higher-yielding currencies. The Japanese economy has been stronger than expected in 2017. Japan's non farm productivity rose 1.3 percent in the second quarter. However, the Core Machinery Orders report showed a decline of 3.6%, the second straight drop.
A key driver for the market is trade dynamics. The US and European economies are weighing in on trade, while Asia's economy is strong. This is creating a toxic brew. The US Federal Reserve has been aggressively raising interest rates since March. The 10-year treasury yield has increased since the start of the year. However, investors are confident the Fed will slow down its aggressive rate hikes.
Inflation is still high in the Eurozone. The US and other economies are tightening monetary policies to counter rising inflation. The US economy has been boosted by strong domestic demand and significant global demand for American goods. However, inflation remains above the Fed's 2% target.
During the Eurozone debt crisis, the EUR to JPY chart has seen volatility. This is a result of the news flow that is generated around this issue. It is also affected by the economic policy of individual Eurozone countries.
The EUR/JPY is also affected by imports and exports. In addition, interest rates are important factors to consider. When interest rates increase, the EUR to JPY pair can become volatile.
Another reason for EUR to JPY's volatility is the policy of the Bank of Japan. The Bank of Japan has been keeping interest rates low for the past decade. This policy is part of an anti-deflation plan that was introduced in 2013. The Yen historically acts as a safe-haven currency when the economy is in a state of turmoil.
In addition, the Japanese Yen is the fourth reserve currency in the world behind the US dollar and the pound sterling. This makes the Yen a preferred currency for traders. Traders will borrow cheaply in the JPY to buy higher-yielding currencies. These are referred to as carry trades.
Traders need to be aware of natural disasters. Although rare, they can have profound effects on the currency. Natural disasters should be taken into account when trading the EUR to JPY.
In addition, traders need to pay attention to the economic policy of Japan and the Eurozone. The economies of these countries are increasingly interconnected. Therefore, traders should pay attention to the fiscal and economic policies of each country.
The EUR to JPY chart is one of the most popular currency pairs in the international forex market. It is influenced by economic factors, financial factors and broad-based market sentiment. It is also affected by political factors.
In addition, the Euro has been weakening due to the UK's decision to leave the EU. This has led to a decrease in demand for the US Dollar. This has in turn boosted the GBP/USD.
The EUR to JPY chart has a strong trading volume. It has a combined average trading volume of over $3.2tn. It also boasts high levels of volatility, which gives traders ample trading opportunities.