EUR / USD

EUR/USD (euro versus US dollar) is by a substantial margin the most-traded currency pair in the global foreign-exchange market, accounting for roughly 22-23% of total daily FX turnover. The euro represents the second-largest reserve currency after the USD, and any major shift in the EUR/USD rate ripples through bond markets, equity allocations, commodity prices (oil and gold are USD-priced) and emerging-market currencies.

EUR/USD is sometimes called 'fiber' (FX-trader slang of obscure origin) or 'eurodollar' (not to be confused with the unrelated 'eurodollar' interest-rate futures contract, which references offshore-USD deposits). The pair is quoted to 4-5 decimal places in OTC FX markets; a 1-pip move is 0.0001 (e.g. 1.0850 to 1.0851).

The euro was launched as an accounting currency on 1 January 1999 (11 founding Eurozone members) and as physical notes and coins on 1 January 2002. The pair started at 1.1747 EUR/USD on launch day and immediately weakened — falling to a low of 0.8230 in October 2000 (so a euro briefly bought less than a dollar). The 2002-2008 bull run took EUR/USD to the all-time high of 1.6038 in July 2008, just before the global financial crisis. Since then the pair has trended structurally lower as the US economy and tech sector have outperformed the Eurozone.

Major modern EUR/USD episodes: 2010-12 Eurozone sovereign-debt crisis (pair fell from 1.50 to 1.20), 2014-15 ECB QE divergence (1.40 to 1.05), 2022 Russia-Ukraine war + ECB lagging Fed (1.13 to 0.95 parity break), 2024 ECB-Fed convergence (1.05 to 1.12). Through 2025-26 the pair has traded in a 1.05-1.12 range reflecting central-bank policy normalisation.

EUR/USD trades 24 hours, Sunday evening through Friday afternoon, on global OTC FX networks. Liquidity peaks during the European-London-US overlap. In IST:

Read EUR/USD alongside three signals. First, the policy-rate differential between the ECB and the Fed — when the ECB is more dovish (lower rates than the Fed), EUR/USD typically weakens; when ECB rates rise faster, EUR/USD strengthens. Second, the German Bund vs. US Treasury yield spread — a narrowing spread usually supports the euro. Third, the European TARGET2 settlement-system balances — these reflect intra-Eurozone capital flows and can presage broader stress events.

EUR/USD is one of the lowest-volatility major FX pairs (annualised vol typically 7-10%), reflecting the broad-base depth of both currencies. Short-term moves are mostly driven by US data prints (NFP, CPI, FOMC) and ECB meetings (every 6 weeks).