Among the factors affecting the price movement of EUR/USD are:
US Fed and EU ECB interest rates - The Federal Open Market Committee (FOMC), a committee within the United States Federal Reserve System (the Fed), meets on a bi-monthly basis, and makes key monetary policy decisions on interest rates and money supply.
The European Commission, an institution of the European Union, typically holds a monetary policy meeting once a month, and is responsible for managing the day-to-day business of the EU – one of the largest trading blocs in the world.
For example, higher interest rates in the US decrease the supply of US dollars in the market, typically causing EUR/USD to fall.
Lower interest rates in the US raise the supply of US dollars in the market, typically causing EUR/USD to rise.
Employment numbers - On the first Friday of every month, the US Department of Labor's Bureau of Statistics releases the Employment Situation Summary for the previous month. The report, which is commonly known as NFP (nonfarm payrolls) or 'jobs report', is an influential statistic on the state of the labor market in America. It represents the number of jobs added or lost over the last month, as well as the change in the unemployment rate.
The Eurozone does not have consolidated employment figures. However, job results and unemployment reports for the major economies in the trading bloc – Germany, France and Italy – tend to have an effect on the exchange rates of the euro.
Geopolitical tensions and uncertainty - Political uncertainty, and/or instability between the EU and US has a major effect on the price of EUR/USD. Not knowing what will happen to political, social and economic realities in these trading blocs can have a psychological effect on day traders who wish to profit from price changes in EUR/USD and other financial instruments.
