10 years of EUR/USD: How did we get to where we are now?

Author: Justin Low | Category: News

10 years of ForexLive, 10 years of navigating through EUR/USD twists and turns


I'll spare you guys the long-winded paragraphs on this one. Instead, here's a timeline of key events in the EUR/USD over the last 10 years as to how price has gotten to where we are trading currently:

September 2007
Fed cuts rates by 50 bps as recession hits.

August 2008
The recession prompts worries in Eurozone's money market, liquidity has been sapped completely and there is a significant increase in net tightening of credit conditions. Fears of a banking crisis start to mount.

October 2008
ECB moves to cut interest rates. By May 2009, rates have been brought close to 0%.

December 2008
Fed cuts rates to near 0%.

October 2009
Greece's new government decides to increase public deficit from 6.7% to 12.7% of GDP.

Early 2010
Europe's sovereign debt crisis begins as market begins to worry about a possible Greek sovereign default, which could impact Portugal and even Italy and Spain. Government bond markets become illiquid and tightening credit standards become a concern once again.

Summer 2010
Some stabilisation in credit conditions eases the above worries.

Summer 2011
Crisis begins to take a toll of Italy and Spain. Bond markets start to become irrational and dysfunctional. The depressed bond prices cause a weakening of regional banks' balance sheets. At the same time, Moody's downgrades Greek debt to 'junk' status.

December 2011
ECB decides to introduce LTROs, second launch was made in February 2012.

July 2012
Draghi's famous words. He says that the ECB "will do whatever it takes" to preserve the euro. Also hints at potential intervention in secondary sovereign bond markets.

September 2012
ECB commits to be the true lender of last resort for the banking system and also announces Outright Monetary Transactions (OMT), where they will purchase bonds issued by Eurozone member states.

December 2013
Fed announces long-awaited tapering of stimulus, to begin in January 2014.

July 2014
ECB prepares market for possible, if not imminent, QE implementation as Eurozone economic growth and inflation continues to stagnate.

January 2015
ECB announces full-blown QE.

December 2015
Fed hikes interest rates for the first time in nearly a decade. Last rate hike before this came in June 2006.

November 2016
Trump wins US election to become the 45th POTUS.

2017
Dollar goes on a weakening path as markets adjust to Trump policies and twin deficit worries start to creep in. Meanwhile, Eurozone economy begins to show signs of life as recovery gains traction.

YTD 2018
Eurozone recovery loses steam and begins to falter as economic data disappoints one after another in Q1. Dollar stages recovery from mid-April as geopolitical tensions rise globally i.e. trade tensions with China and EU, Iran nuclear deal, Brexit woes, and now the situation in Turkey.

Hope this has been a useful catch up on the EUR/USD over the past decade. In case you missed it earlier, Eamonn briefed about the last 10 years in the AUD/USD here. :)
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