Created
: 2024.12.31
- English
- English
- What's Myforex
- Share
- Use tools
- Get information
- What's New
- Help center
- About us
- Customer support
- Terms and policies
-
-
PortfolioShare your portfolio and performance in real time -
Events & contestsEvents and contests held by retail brokers around the world
-
-
Real-time spread comparisonCompare spreads of major retail brokers in real time -
Volatility analysisVisualize volatility as a measure of daily market activity -
Swap point comparisonCompare buy and sell swap values for each broker by symbol -
Market rates & chartsCheck prices for all instruments offered by each broker -
IndicatorsProviding in-house developed indicators for MT4/MT5 -
Trading calculatorsCalculation tools for each broker to help you trade
-
-
World FX newsLatest news on forex and cryptocurrencies from around the world -
Broker informationTrading information of retail brokers worldwide -
MetaTrader4/5 user guideUser guide collection for the latest MetaTrader4/5 -
Economic calendarRelease calendar for indicators from official sources of major economies
EUR/USD maintains position above 1.0400, volumes remain light on New Year Eve
World FX news
Breaking news
EUR/USD maintains position above 1.0400, volumes remain light on New Year Eve
New
2024.12.31 13:37
2024.12.31 13:37
2024.12.31 13:37
- EUR/USD inches higher as the US Dollar remains under pressure due to weaker Treasury yields.
- US Treasury yields declined by approximately 2% on Monday, with 2-year and 10-year yields at 4.24% and 4.53%, respectively.
- The Euro struggles as the ECB continues to provide dovish guidance on its interest rate policy for the upcoming year.
EUR/USD gains ground on Tuesday, trading near 1.0410 during the Asian session after posting losses on the previous day. The EUR/USD pair's rebound can be attributed to a subdued US Dollar (USD) following weaker Treasury yields.
The US Dollar Index (DXY), which tracks the US Dollar (USD) against six major currencies, holds minor losses near 108.00 as US Treasury yields fell by approximately 2% on Monday. The 2-year and the 10-year yields stood at 4.24% and 4.53%, respectively.
However, the risk-sensitive EUR/USD pair faces challenges as the Federal Reserve (Fed) may adopt a more cautious tone regarding potential rate cuts in 2025, signaling a shift in its monetary policy approach. This adjustment comes amidst uncertainties tied to the economic strategies expected under the incoming Trump administration.
Additionally, the safe-haven outflows put pressure on the Euro amid heightened geopolitical risks stemming from the prolonged Russia-Ukraine conflict and ongoing tensions in the Middle East. Israel's ambassador to the United Nations, Danny Danon, issued a stern warning on Monday to Yemen's Iran-backed Houthi militants, urging them to cease their missile attacks on Israel, per Reuters.
The European Central Bank (ECB) maintains dovish guidance on interest rate policy for the next year, which puts downward pressure on the Euro and the EUR/USD pair. The ECB reduced its Deposit Facility rate by 100 basis points (bps) to 3% this year and is expected to lower it to 2%, which policymakers see as a neutral rate, by the end of June 2025. This suggests that the ECB will cut its key borrowing rates by 25 bps at every meeting in the first half of next year.
Euro FAQs
The Euro is the currency for the 19 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB's primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates - or the expectation of higher rates - will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB's 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone's economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
Last updated
: 2024.12.31
Related articles
USD/JPY softens below 157.50 amid holiday season in Japan
9 minutes agoChina's NDRC: Fully confident in achieving continued economic recovery in 2025
31 minutes agoUSD/INR drifts higher ahead of US PMI release
57 minutes agoPBOC sets USD/CNY reference rate at 7.1878 vs. 7.1879 previous
2025.01.03 10:18USD/CAD weakens below 1.4400 on upbeat Canadian PMI, higher crude oil prices
2025.01.03 10:15South Korean authorities attempt to arrest President Yoon Suk Yeol
2025.01.03 09:27
FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.
Was this article helpful?
We hope you find this article useful. Any comments or suggestions will be greatly appreciated.
We are also looking for writers with extensive experience in forex and crypto to join us.
please contact us at [email protected].
Thank you for your feedback.
Thank you for your feedback.
Most viewed
USD/JPY softens below 157.50 amid holiday season in Japan
The USD/JPY pair edges lower to near 157.30 during the Asian trading hours on Friday.
New
2025.01.03 12:24China's NDRC: Fully confident in achieving continued economic recovery in 2025
The National Development and Reform Commission (NDRC), China's state planner, said in a statement on Friday that it is "fully confident in achieving continued economic recovery in 2025." Additional takeaways Will sharply increase funding from ultra-long treasury bonds this year to support "two new" programmes.
New
2025.01.03 12:02USD/INR drifts higher ahead of US PMI release
The Indian Rupee (INR) extends the decline on Friday after closing at its weakest level on record for the eighth consecutive session.
New
2025.01.03 11:36Gold price holds ground due to safe-haven demand amid rising tensions in Middle East
Gold prices (XAU/USD) edges higher for the fourth consecutive session on Friday, building on a stellar performance in 2024 with gains exceeding 27%, the metal's best annual return since 2010.
New
2025.01.03 11:17PBOC sets USD/CNY reference rate at 7.1878 vs. 7.1879 previous
The People's Bank of China (PBoC) set the USD/CNY central rate for the trading session ahead on Friday at 7.1878, as compared to the previous day's fix of 7.1879 and 7.2868 Reuters estimates.
New
2025.01.03 10:18USD/CAD weakens below 1.4400 on upbeat Canadian PMI, higher crude oil prices
The USD/CAD pair softens to near 1.4395 on Friday during the Asian trading hours.
New
2025.01.03 10:15South Korean authorities attempt to arrest President Yoon Suk Yeol
South Korean investigators were reportedly involved in a standoff with a military unit inside the presidential residence as they attempted to arrest the country's suspended leader, Yoon Suk Yeol, weeks after his botched attempt to declare martial law on December 3, per Reuters.
New
2025.01.03 09:27EUR/USD kicks off 2025 with a fresh move to the downside
EUR/USD took another leg lower to kick off the 2025 trading season, falling eight-tenths of one percent and tapping the 1.0250 level for the first time since November of 2022, a nearly 26-month low.
New
2025.01.03 09:12Biden discussed plans to strike Iran nuclear facilities before Trump's inauguration
Joe Biden reportedly discussed plans to attack Iran's nuclear facilities in the event Tehran moved closer to building a nuclear bomb before Donald Trump's inauguration on January 20, three sources with knowledge of the issue tell Axios.
New
2025.01.03 09:11NZD/USD holds below 0.5600 on stronger US Dollar, eyes on US PMI data
The NZD/USD pair remains on the defensive around 0.5590 during the early Asian session on Friday, pressured by the firmer Greenback.
New
2025.01.03 08:57Disclaimer:
All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.
The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.
Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy
