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  • EURUSD currency pair

    Why is EURUSD one of the most popular pairs among traders?

  • #2
    Why is EURUSD one of the most popular pairs among traders?

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    • #3
      The eurusd currency pair is one of the most used pairs among traders because of its high volatility, and compared to other currency pairs, the EURUSD is easier to predict.

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      • #4
        Its popularity is due to the fact that the U.S. and the EU are the two strongest economies in the world. The euro is considered the base currency, and the dollar - quoted. In addition, the pair reacts quite predictably to major economic indicators for the U.S. and the EU. In addition, news about these two economies are released with regularity. EUR/USD accounts for more than half of all trading volumes in the global Forex market.

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        • #5
          Liquidity and volatility.
          These concepts are the key ones for trading. Why does this pair has the highest liquidity and volatility? First of all, you should know that the major part in forex is taken by institutional investors like different banks, funds, governments also trade forex. So, the biggest amount of operations are made by these participants. Euro and US dollar are the currencies of the greatest demand. The vast majority of all the international trades are made in dollars. This is one of the most consistent and stable currencies in the world. The amount of financial communication between the Unoted States and Euro zone is unprecendented. The amount of trading operations between these two political organisations is unprecedented, so the companies and banks need constatnly exchange their currencies. That is why EUR/USD is so liquid and volatile.
          Why do traders need liquidity and volatility? As for liquidity, the higher liquidity the faster execution of the deals. If the liquidity is high, then many people are ready to buy oe sell this currency all the time. We can compare USD with BRL (Brazil real). Who needs it? There are definetely some companies which exchange dollars for reals but their number is much smaller than those institutions which are interested in dollars or euros. If you trade Brazil real, be ready for the fact that it will take some time to buy or sell this currency.
          Volatility is also of utmost importance for traders. Simply speaking, volatility is the amount of changes which this or that currency undergoes during some period of time. Traders gain profits from fluctuations in prices. If the price is stands still, there is no chance to profit from it.
          That is why EUR/USD is the most popular pair among the traders.

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