Convert EUR to USD
Whenever the ECB or the Fed takes a dovish stance and cuts cash rates or announces stimulus measures to boost economic growth, it weakens the outlook for the Euro or the US dollar respectively. On the other hand, a more hawkish approach to monetary policy, e.g. hiking interest rates, signals greater confidence by the central bank on the region's economy, thereby boosting the value of the respective currency.
Bond yields that drive the most impact on the EUR or the USD are the German 10-year bond and the US 10-year Treasury bond. Higher bond yields drive up the value of the corresponding currency. Hence, whenever German bond yields rise or US bond yields fall, EUR/USD's exchange rate will rise higher.
Unlike several currency pairs, EUR/USD does not trade very volatile too often, as the exchange rate sees sharp moves very infrequently. Only major market moving news drives high volatility in this pair, making it a safe and stable forex pair for newbie traders to begin trading. Both currencies are seen as safe and the risk of trading Euro/US dollar is not too high, as a result.