Euro / US Dollar - EUR/USD

The EUR/USD is the first negotiated foreign exchange market (Forex) in terms of annual volume (30% of the whole worldwide currencies purchases and sells).

This cross is the object of futures and options contracts really buoyant on the CME (Chicago Mercantile Exchange). The EUR/USD cross rates are also affected by the speculators and investors “vision” of the US Dollar evolution, as by that of the Euro’s.

So, all the economical news leads to the idea that one of the 16 member countries of the Euro will affect the Euro and as a consequence the EUR/USD cross rates will also be affected.  Nevertheless, the monetary policy managed by the FED (the American Federal Reserve) and the information about the American economy have more influence on the EUR/USD evolution.

With a 1.18 (1 EUR = 1.18 USD) mean value during the ten year period previous to the introduction of the EURO in January of 2000, the EUR/USD cross first decreased (reaching its lowest value of 0.8252, in May 2000).  Then, the cross has been globally rising since the Euro effective entry into service; from January 2002 to July 2008 (except in 2005 when the Dollar apprises again at the hands of the Euro): EUR/USD = 1.3633 on December, 28th 2004 ; EUR/USD = 1.6038 on  July, 15th  2008.

An unprecedented reversal happens in favor of the Dollar from July to November 2008; the EUR/USD rates decreased by 23% in just a few months. Then rates violently increased as in only a few weeks until the end of December 2008 at 1.4659, the EUR/USD apprises again by 20%. This was followed by a new decrease of 15%, and to finish a new rise correction on March 2009.

A lot of analysts think that as long as questions will remain about the future of the whole financial system, in a context of a worldwide economic and financial crisis, investors would massively buy Dollar as a « defensive security », so at a structural level the EUR/USD wouldn’t be increasing.