The euro is administered by the EU Central Bank (ECB). This means that the ECB has a more hawkish approach to interest rates. This indicates that they have an inclination to favor a rise in interest rates. This implies that changes in something like the retail price index in Germany won’t affect EUR IRs and therefore the cost of the EUR in the same way that the same situation in the States will affect the cost of the greenback.
Another point that is necessary to remember if you’re concerned in Euro trading is that although there are at present twenty-seven member nations of the EU, only 16 of them are members of the EMU (the Eurozone). The others have opted not to join the Eurozone for their own reasons. Particularly, the United Kingdom is in the ECU but doesn’t use the Euro, while Switzerland is not an affiliate of the ECU at all . They have retained their own state currencies, the English pound and the Swiss franc. This suggests that the basic factors influencing the cost of the EUR depend principally on the commercial situation in just 4 western european nations. Those states are Germany, France, Italy, and Spain in that order. Together, they produce 75% of the GDP of the Eurozone.
Therefore, the currency exchange trader who is involved in EUR trading needs to watch for major industrial reports in those four nations while understanding the economic situation in other EU nations will have far less of an effect on EUR trading.