SAIM FOREX ACADEMY

NAME: ABEERA SHAUKAT

ASSIGNMENT: NO 4
TOPIC: FUNDAMENTALS OF EURO

FUNDAMENTALS OF EURO
 EURO IS ALSO CALLED ANTI-DOLLAR. IT MOVES OPPOSITE TO THE DOLLAR. MANY
PEOPLE ALSO SAY THAT IT IS A CURRENCY WITHOUT A COUNTRY. EUROPE IS A
COLLECTION OF 19 COUNTRIES. IT IS ALSO CALLED EUROZONE.
 THE EURO IS THE MOST LIQUID TRADED CURRENCY IN THE WORLD AFTER THE DOLLAR.
EUR/USD ARE MOST LIQUID CURRENCIES. WHEN THE MOST LIQUID CURRENCIES ARE
COMBINED, SO THEIR DEMAND IS HIGH IN THE MARKET. SO SPREADS ARE LOW
BECAUSE OF THEM.
 AFTER THE BREXIT IT’S BECOME MORE LIKE A POLITICAL CURRENCY.
BREXIT
BREXIT IS AN ABBREVIATION OF TWO ENGLISH WORDS ‘BRITAIN AND EXIT’ AND
REFERS TO THE WITHDRAWAL PROCESS OF THE UNITED KINGDOM FROM THE
EUROPEAN UNION. ARTICLE 50 OF THE TREATY OF THE EUROPEAN UNION REGULATES
THE WITHDRAWAL PROCESS OF ANY MEMBER STATE.
 JUST LIKE US SERVICE ORIENTED ECONOMY, EUROPE IS ALSO A SERVICE ORIENTED
ECONOMY EVEN WITHIN IT WHICH IS HEALTH CARE, TRANSPORTATION, REAL STATES.
EVEN WITHIN IT THESE INDURTIES COME.
 FOCUS ON GARMANY ECONOMIC DATA AND POLITICAL DEVELOPMENT IT IS ALSO
THIRD LARGEST IMPORT AND EXPORT.CD
 THE PAIR WITH EUR IS THE MOST LIQUID. MOST OF THEM HAVE VOLUME. TRADING
VOLUME IS THOSE IN WHICH THERE ARE MORE TRADES.
 MOST LIQUID TRSDING SESSION: NEW YORK AND LONDON OVERLAP.
 BEST TIME TO TRADE USD AND EUR: NEW YORK AND LONDON TRADING SESSION.
 EUR IS RESERVE CURRENCY (USED CENTRAL BANKS).
 FOCUS ON ECB.
EUROPEAN CENTRAL BANK
THE EUROPEAN CENTRAL BANK IS ONE OF THE MOST IMPORTANT INSTITUTIONS IN THE
EUROPEAN UNION AND PLAYS CENTRAL ROLE IN THE EUROZONE’S MONETARY POLICY
AND FINANCIAL STABILITY.
 CENTRIAN CURRENCIES ARE ALSO PEGGED TO EUR.
SEVERAL CURRNCIES AROUND THE WORLD ARE PEGGED TO THE EURO, WHICH MEANS
THAT THEIR EXCHANGE RATES ARE FIXED TO A SPECIFIC VALUE AGAINST THE EUR. THIS
PEGGED IS TYPICALLY DONE BY THE CENTRAL BANKS OR MONETARY AUTHORITIES OF
 THESE COUNTRIES TOMAINTAIN SATBILITY IN THEIR FOREIGN EXCHANGE RATES AND TO
FACILITATE TRADE AND ECONOMICRELATIONS WITH THE EUROZONE.
 EUR CONTRIBUTE (57.6%) OF USD INDEX.
USD INDEX
THE U.S DOLLAR INDEX, OFTEN REFERRED TO SIMPLY AS THE DOLLAR INDEX, IS A
MEASURE OF THE VALUE OF THE UNITED STATES DOLLAR RELATIVE TO A BASKET OF
SEVERAL MAJOR WORLD CURRENCIES. IT PROVIDES A WAY TO TRACK THE OVERALL
STRENGTH OR WEAKNESS OF THE U.S DOLLAR IN INTERNATIONL CURRENCY MARKETS.
THE U.S DOLLAR INDEX IS MAINTAINED AND PUBLISHED BY INTERNATIONAL EXCHANGE,
INC (ICE).
CURRENCY BASKET
THE EXCHANGE RATES BETWEEN THE U.S DOLLAR AND A BASKET OF SIX MAJOR WORLD
CURRENCIES.
1. EURO (EUR).
2. JAPANESE YEN (JPY).
3. BRITISH POUND STERLING (GBP).
4. CANADIAN DOLLAR (CAD).
5. SWEDISH KRONA (SEK).
6. SWISS FRANCE (CHF).
 EURO TRADES MOST WITH THESE COUNTRIES.
1. IMPORTS: CHINA, UK, US.
2. EXPORTS: US, UK, CHINA.
ANY ECONOMY WITHIN THESE COUNTRIES CAUSE PROBLEMS, THEN THE EXPORTS OF
EURO FALL.

ECONOMIC INDICATORS OF EURO

FOLLOWING ARE THE ECONOMIC INDICATORS OF EURO.
1. ZEW ECONOMIC SENTIMENT INDEX.
2. CPI.
3. PPI.
4. TRADE BALANCE.
5. INDUSTRIAL PRODUCTION INDEX.
6. MANUFACTURING AND NAN MANUFACTURING PMI.
7. EMPLOYMENT AND UNEMPLOYMENT.
8. GERMANY IFO BUSINESS CLIMATE INDEX.

ZEW ECONOMIC SENTIMENT INDX

 ZEW STANDS FOR “ZENTRUM FUR EUROPAISCHE WIRTSCHAFTSFORSCHUNG”.
THE ZEW ECONOMIC SENTIMENT INDEX IS A WIDELY FOLLOWED ECONOMIC INDICATOR
THAT MEASURES THE SENTIMENT OR CONFIDENCE OF FINANCIAL ANALYSTS AND INVESTORS
REGARDING THE ECONOMIC OUTLOOK OF GARMANY AND EUROZONE.

GERMANY IFO BUSINESS CLIMATE INDEX

THE GERMAN IFO BUSINESS CLIMATE INDEX RATES TE CURRENT GERMAN BUSINESS
CLIMATE AND MEASURES EXPECTATIONS FOR THE NEXT SIX MONTHS. IT IS A COMPOSITE
INDEX BASED ON A SURVEY OF MANUFACTURERS, BUILDERS, WHOLESALES AND RETAILERS.

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