How to Read EUR/USD
EUR/USD = 1.08 means one euro buys $1.08. If the pair rises, the euro has strengthened; if it falls, the euro has weakened.
EUR is the base currency (the one being priced); USD is the quote currency. Buy EUR/USD if you expect the euro to strengthen; sell if you expect it to weaken.
What Drives EUR/USD
ECB vs Fed Policy: The interest rate differential between the European Central Bank and the Federal Reserve is the dominant driver. If the Fed hikes while the ECB holds, the dollar typically strengthens and EUR/USD falls.
Economic Data: Eurozone GDP, PMI surveys and German industrial output move the euro. US non-farm payrolls (NFP) and CPI inflation data drive the dollar side.
Risk Sentiment: During global risk-off episodes, the dollar tends to outperform the euro as a safe-haven currency.
EUR/USD and Emerging Markets
EUR/USD influences global USD liquidity. A weaker dollar (rising EUR/USD) is generally positive for emerging market assets as it eases financial conditions globally.
For Turkey specifically, EUR/USD affects the EUR/TRY cross rate. Significant EUR/USD moves ripple through Turkish import and export costs.