Fundamental factors affecting the change of the Euro exchange rate
rebateforexEurozone: The Eurozone cons Forex Rapid Rebatets of 12 countries, Germany, France Italy, Spa ForexRapidRebate, the Netherl rebateforexfees, Belgium, Austria, Finland, Portugal, Ireland, Luxembourg and Greece, all using the Euro as the currency in circulation European CentralBank (ECB): The European Central Bank controls the Eurozone. The ECBs monetary policy decision-making body is the Central Bank Committee, which consists of the Executive Board and the presidents of the central banks of the 12 member countries. The Executive Board includes the President of the ECB, Vice President and four members: President of the ECB, Wim Duisenberg (Netherlands) Vice President, Lucas Papademos (Greece) Member (Chief Economist), Tom Otmar Issing (Germany) Member (Germany) Member TomassoPadoa-Schioppa (Italy) Member, EugenioDomingoSolans (Spain) Member, SirkkaHamalainen (Finland) ECBs policy objectives: the primary objective is to stabilize prices Its monetary policy has two main bases. One is the outlook on the direction of prices and the risk of price stability Price stability is measured mainly through the adjusted Index of Consumer Prices (HarmonizedIndexofConsumerPrices (HICP) so that its annual growth is less than 2% HICP is particularly important and consists of a series of indices and expected values, which are important indicators of inflation Second is the control of money growth Money supply (M3) ECB sets the reference value of M3 annual growth at 4.5% ECB holds a committee every two weeks on Thursdays to develop a new interest rebateforexbroker indicator After the first meeting of each month, the ECB issues a briefing to announce the outlook for monetary policy and economic conditions in general InterestRates:General interest rates are used by central banks to regulate money market liquidity for "The spread between this rate and the U.S. federal funds rate is one of the factors determining the cashback forex exchange rate Eurodeposit (Euribor): 3-month European euro deposits refer to euro deposits placed in banks outside the euro zone. For example, when the interest rate on 3-month Eurodeposit is higher than the interest rate on 3-month Eurodollar deposits for the same period, the EUR/USD exchange rate is boosted GovernmentBonds: 10-year government bonds, whose spread over the 10-year U.S. Treasury bill is another important factor affecting the EUR/USD. The 10-year government bond is usually used as a benchmark if its interest rate level is lower than that of the U.S. Treasury bill during the same period, then if the spread narrows (i.e. German bond yields rise or U.S. Treasury yields fall), it will theoretically push up the EUR/USD exchange rate, so the spread between the two is generally more informative than the absolute value of the two EconomicData:Economic data The most important economic data comes from Germany. The main data for the largest economies in the Eurozone include GDP, inflation data (CPI or HCPI), industrial production and unemployment rates, including the IFO survey (a widely used business confidence survey index) and the fiscal deficit of each member state, in accordance with the Eurozones Stability and Growth Pact (the Stability and Growth Pact). theStabilityandGrowthPact, each countrys fiscal deficit must be controlled at less than 3% of GDP, and each country must have the goal of further reducing the deficit CrossRateEffect: cross-exchange rate impact as the U.S. dollar exchange rate, the cross plate will also affect the euro exchange rate EuroFuturesContract( Euribor: The March Euro Futures Contract This contract value shows the markets expectations for the 3-month Euro deposit rate (and the contracts maturity date) For example, the spread between the March Euro Futures Contract and the March Euro Futures Contract is the fundamental change that determines the future movement of EUR/USD Political factors Compared to other exchange rates, EUR/USD is most vulnerable to Political factors, such as domestic factors in France, Germany or Italy, political and financial instability in the former Soviet Union countries can also affect the euro, as a significant portion of German investors have invested in Russia.