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The common currency Euro is the second most liquid currency in the forex market after the US dollar and enjoys official currency status across 19 EU member nations as well as four non-EU nations as well. It is denoted by the symbol EUR on the forex market, and its currency sign is “€”.

The exchange rate of EUR currency pairs is heavily influenced by important economic data releases from the Eurozone and from leading member nations such as Germany and France. Some of the key economic data that cause changes in the conversion rate of Euro forex pairs include GDP, unemployment rate, inflation, business sentiment, consumer confidence, retail sales and trade balance. Weak economic data from the region reduces investor confidence in the EU, causing traders to sell off the Euro and weaken its value, while positive data boosts its strength against other currencies in the forex market.

In addition, the currency rate of EUR pairs also experiences considerable volatility on any changes to the monetary policy or interest rates taken by the European Central Bank (ECB). For instance, when the ECB turns hawkish in its monetary policy decisions or hikes interest rates, the Euro strengthens against its peers while a dovish tone or rate cut weakens the common currency.

The EUR came into being as an account currency on 1 January 1999 in place of its predecessor, the European Currency Unit. The European Currency Unit it replaced was essentially an idea of a basket of currencies and was not a tangible currency in itself, unlike the EUR in its present form. In addition to being the official currency across 21 countries, it is also used in several territories and sovereign states of EU member nations. Like the US dollar, the EUR is also considered a reserve currency owing to the perceived stability of the Eurozone economy, and several other currencies have also pegged their value to it.