EUR/USD

what is the euro US dollar currency pair and why is it so popular with traders well it's put simply it's the exchange rate of the euro to the US dollar so for example if the rate is one point one zero zero zero it means that one euro buys you one dollar and ten cents and of course this will move around during the day it is the most widely traded currency pair clearly there are lots of different world currencies that can be traded but euro US dollar in terms of volume is the most popular on a daily basis or has been historically the large volumes seen in foreign exchange markets means the spread is tight so that the cost of doing business is incredibly low and normally we're guaranteed at least some volatility during the day through the week over a month and it's all of this it's these movements and that the cost of trading that make it popular with traders so how do you trade euro US dollar with capital com you trade contracts for difference CFDs that may be a term that you're familiar with when you're trading using CFDs you trade using leverage short term traders have used leverage for many years what leverage means is in a nutshell a small initial deposit controls a much bigger financial position so they're magnifying their potential for profit but of course hand in hand with that goes the fact you're magnifying your losses when things don't turn out as planned so it's really important more important than ever when trading using CFDs and leverage that you have some sort of risk control in place such as stop losses and of course you can trade markets in both directions you know for example at the time were recording in recent months the euro has been weakening against the US dollar so this sensible side of the market has been to be short the euro so you have a position that makes money if euro US dollar falls so you can do that with CF DS and of course you can trade long if you think the euro is going to increase against the US dollar you can by using CFDs and profit from a rise the point is you can trade markets in both directions so let's take a quick look at euro US dollar and so are the movements so back in March 2018 the euro was trading around about 125 so a euro would buy a dollar and 25 cents since then it has slipped back towards the sort of the 110 area so it's lost something in the order of sort of 1,500 points over that period you can see the trend since then has been pretty weak let's take a look at a much shorter term view so this is the last couple of days at time of recording so the market euro dollar has been as low as about one 1115 and is traded as high as one 1180 over here so we've seen a swing of around what what's 65 points over a day a day and a half and it's this sort of volatility these sort of sharp moves that really make euro US dollar a popular market with foreign exchange traders around the world so as ever with foreign exchange tight spreads play their part the cost of trading is low plus the sort of volatility we see in these markets because they get moved by so many different economic fundamental and political events means they continue to be really popular markets with traders around the world you can trade it through capital calm using CFDs contracts for difference your trading using leverage so you got the potential to magnify your profits but hand-in-hand with that is the risk of magnifying your losses as well so as I said it's very important to use risk management techniques such as stop losses plus of course you can trade markets in both directions which is very important if you're a short to medium term trader you know you need the ability to try and profit from falling