Lesson 2 of 12 · 10 min
EUR/USD: the benchmark
How the world's most traded pair behaves, why US news often moves it more than euro news, and what to watch on your calendar each week.
By the end you'll be able to
- Describe what sets EUR/USD apart, from its liquidity and spread to its busiest hours
- Explain how the ECB–Fed rate gap and US and eurozone data move the pair
- Size a EUR/USD trade from a fixed risk and plan your week around the key releases
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Eurozone business surveys come in strong at 09:00 and EUR/USD ticks higher. At 13:30 a US inflation figure lands, and the pair gives back the whole morning in five minutes. Which half of the pair were you watching?
The deepest market in forex
EUR/USDFiber
The deepest, cheapest market in forex: it can drift for days, then move hard on US data or a central-bank surprise.
LiquidityDeepest
The most traded pair in the world
Typical volatilityModerate
Ordinary days often 50–90 pips
Typical spread (shorter bar = cheaper)Tightest
Often under 1 pip in busy hours
Sensitivity to risk moodMild
Tends to dip in risk-off as the dollar is bought
When it moves (UK time)
Most active in the London session (about 07:00–13:00) and the London–New York overlap (about 13:00–17:00), usually the busiest stretch. Illustrative UK times; Asian-session hours shift by about an hour with daylight saving.
Main drivers
The EUR/USD personality card: deepest liquidity, tightest typical spread, a fixed $10 pip and a day that peaks in the London–New York overlap. Typical behaviour, not a forecast; figures are illustrative.
EUR/USD is the price of one euro in US dollars. It is the most traded currency pair in the world, at around a fifth of all global currency turnover.
That depth of liquidity keeps its spread usually among the tightest in the market: commonly around a pip or less on a standard account in London and New York hours. It widens in quiet Asian hours, at the daily rollover and around big releases.
The dollar is the quote currency, so the pip value is fixed: a pip is worth $10 per standard lot, whatever the price.
The activity strip shows its rhythm: it wakes with the London session at about 07:00 UK time and is usually busiest in the London–New York overlap, about 13:00–17:00, when most US data lands at 13:30.
A dollar pair first
How a rate decision reaches a currency, step by step. For EUR/USD the chain runs on both sides at once: a Fed hike tends to push the pair down, an ECB hike tends to push it up.
Over weeks and months, EUR/USD follows the gap between the interest rates set by two central banks: the European Central Bank (ECB) and the US Federal Reserve (Fed). If US rates are expected to rise relative to eurozone rates, money moves towards the dollar and EUR/USD tends to fall. If the gap is expected to narrow, the pair tends to rise. Decisions are signalled weeks ahead, so they are usually priced in by meeting day. The surprise moves the price.
US data moves every dollar pair at once, and on many days it moves EUR/USD more than euro news does. A strong eurozone survey can be swamped an hour later by a hot US inflation figure. Read EUR/USD as a dollar pair first.
Your weekly EUR/USD calendar
Six releases do most of the work. Check the economic calendar each Sunday and note which of these fall in the week ahead.
| Release | Usual timing (UK time) | Why it matters |
|---|---|---|
| US jobs report (NFP) | Usually the first Friday of the month, 13:30 | Strong hiring means less pressure on the Fed to cut |
| US inflation (CPI) | Around the middle of the month, 13:30 | Hot inflation tends to keep Fed rates higher for longer |
| Eurozone flash PMIs | Around the third week, early London morning | Business surveys: the earliest read on eurozone growth |
| Eurozone flash HICP | Around the turn of the month, mid-morning | The inflation measure the ECB’s target uses |
| ECB decision | Eight times a year, 13:15, press conference 13:45 | Changes the euro side of the rate gap |
| Fed decision | Eight times a year, 19:00, press conference 19:30 | Changes the dollar side of the rate gap |
US data shifts to 12:30 UK time for a few weeks in spring and autumn, when the clocks change on different dates. The lessons on central banks, jobs data and NFP and inflation and CPI explain how to read each one.
The lesson on sizing across pairs shows how the same sum changes on pairs where a pip is not $10.
Try it
| Time | Cur. | Impact | Event | Previous | Forecast | Actual |
|---|---|---|---|---|---|---|
| 13:30 | USD | ●●● | CPI (inflation, year on year) | 3.2% | 3.1% | — |
A mock US CPI release. Slide the actual figure away from the forecast and watch the typical EUR/USD reaction. The market reacts to the surprise, not the number. Reactions are illustrative.
Notice how a hotter-than-forecast US figure pushes EUR/USD down even though nothing changed in Europe, and how a figure exactly on forecast barely moves it.
Quick check
Quick check
Question 1 of 4
The Fed holds rates but signals they will stay higher for longer than markets expected. The ECB says nothing new. What does EUR/USD tend to do?
Question 2 of 4
US CPI comes out exactly on forecast. What is the typical reaction in EUR/USD?
Question 3 of 4
When is EUR/USD usually most active, in UK time?
Question 4 of 4
You have $3,000, risk 1% and use a 20-pip stop on EUR/USD. What size do you trade?
Go deeper: EUR/USD Trading Guide: What Moves It and When to Trade · How Interest Rates Affect Currency Prices · How to Read an Economic Calendar