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What Moves Euro Currency Futures?

eurusd price study

If you are interested in trading Euro currency futures, an understanding of the Euro and how it came into existence is important.

The European Commission is a monetary union that can trace its roots back to the sixties. It tasked Pierre Werner with finding how the volatility of currencies in the region could be dealt with. The first signs of serious progress were seen in 1988 when the European council agreed on the framework for monetary co-operation.

During the nineties negotiations continued that resulted in the growth and stability pact. In order to participate, member states had to agree to strict caps such as limits on budget deficits, interest rates and debt ratios. The Euro currency was borne and used among the member states.

Daily Euro FX Prices (CME)

Economic Indicators Affecting Euro Currency Futures Exchange Rates

An economic zone that spans 17 countries and GDP in terms of trillions can be daunting for any trader.  However there are certain indicators that can guide you when looking for trading breakouts. These include:

Monetary Policies

Inflationary concerns are seen to mean future interest hikes. If inflation is under control, it is unlikely there will be future hikes. The former is deemed good for the Euro.

eurusd point and figure chart

Economic Growth

In general if the GDP shows growth, then this is good news for the currency.


High inflation in the euro zone means the Euro will depreciate compared to other currencies. The CPI is the indicator to look out for as it captures any signs of inflation. Most Euro currency futures traders look out for the CPI flash estimate which is released two weeks earlier as it tends to show any signs of inflation across the major economies.

The Balance Of Payments

You need to keep an eye on the current account reports. Surpluses in current accounts indicate capital inflows which are good for the Euro. Outflows of capital are bad for the Euro.

Market Sentiment

Look out for the ZEW survey which samples the opinions of 350 financial experts on the direction of the economy. Generally if the ZEW is above zero it shows optimism with the opposite showing pessimism.

Other Factors That Cause Euro Currency Futures To Strengthen Or Weaken

The exchange rate for the Euro currency futures is mostly determined by market forces of supply and demand. These forces include speculation where brokers try to anticipate future market moves. These in turn will lead to pressures on exchange rates. Another factor is the state of foreign trade.

Huge demand for euro exports will strengthen the Euro while deficits will be negative news for the Euro.

Best Time To Trade Euro Currency Futures

The most active time to trade is when the London markets open at 8:00 GMT till when the U.S markets close at 22:00 GMT. This period consists of three major sessions namely the London, US and the Asian session. Trading during these hours is your best bet.

In a bid to calm the markets, the European Central Bank (ECB) has been buying Italian and Spanish bonds on the secondary markets. This led to the lowering of bond yield rates to below the six percent limit. The intervention has also led to the significant rise in gold and silver prices.

As usual, it is important to keep an eye on any moves by the ECB as it is a signal on the future direction of the Euro currency futures.

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