This article provides an overview of the factors affecting the leading currency pair: Euro-dollar exchange, commonly expressed as EUR/USD.The euro to dollar exchange rate is the price at which the world demand for US dollars equals the world supply of euros. Regardless of geographical origin, a rise in the world demand for euros leads to an appreciation of the euro.Four factors are identified as fundamental determinants of the real euro to dollar exchange rate:.The international real interest rate differential.Relative prices in the traded and non-traded goods sectors.The real oil price.The relative fiscal position .
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