The U. Dollar The United States and the US dollar have a special role in the currency markets, as it has long been accepted as a reserve currency and the currency of choice for international monetary transactions.
When economic activity slows down, the dollar weakens. Because the United States is also considered a safe haven for assets of all kinds, the dollar tends to rise during times of political or global financial tumult.
It follows that same pattern of responses to economic activity throughout the region as does the U. When economic activity in the European Union is strong, the euro strengthens; when economic activity slows, the euro will weaken.
Despite the challenges that the region has experienced in recent years, or perhaps because of them, the currency remains a strong interest for currency traders worldwide. A primary factor that influences the U. Dollar to Euro FX trading analysis is the relative strength of the two economies.
One key sign of the relative strength of the two economies is the level of interest rates. When U.
When eurozone interest rates are higher, the dollar weakens. If differences among the 16 European nations are serious or threatening, the dollar is will strengthen against the euro.