What is Estr? Definition of Estr in Forex

In Forex trading, ESTR (Euro Short-Term Rate) is a benchmark interest rate that reflects the cost of unsecured overnight borrowing in euros.

Glossary

by Adam Mass

2 months ago 0 20

Estr (Euro Short-Term Rate) is a short-term interest rate in the Eurozone, used as a reference for various financial instruments, including Forex trading. Estr reflects the cost of unsecured overnight borrowing between banks in the Eurozone.

To better understand Estr, please follow the article below with FOREX89!

Table of Contents:

What does Estr mean in Forex?

In Forex trading, Estr plays a crucial role in determining interest rates and affecting currency pairs related to the Euro (EUR). Estr is used to assess interest rate trends and influences traders’ decisions.

Estr is calculated by the European Central Bank (ECB) based on actual transactions occurring in the money market. The calculation formula for Estr includes:

Data from unsecured transactions in the money market.
Weighted average value based on trading volume.
Published daily at 08:00 CET.

What is the difference between Estr and Euribor?

Both Estr and Euribor are key interest rate indicators in the Eurozone, but they differ as follows:

Estr: Unsecured overnight interest rate based on actual transactions.
Euribor: Interbank interest rate with multiple maturities (1 week, 1 month, 3 months, 6 months, 12 months) based on quotes from major banks.

How does Estr affect Forex trading?

Estr directly impacts the exchange rate of the Euro. When Estr rises, borrowing costs in the Eurozone increase, leading to capital flow changes and potentially strengthening the EUR. Conversely, if Estr declines, the Euro may weaken.

At OANDA, Estr is an important indicator to monitor, especially for traders focusing on EUR-related currency pairs such as EUR/USD, EUR/GBP, and EUR/JPY. Any changes in Estr can influence market trends.

Estr is a key short-term interest rate in the Eurozone, significantly impacting Forex trading and other financial instruments. Understanding and tracking Estr will help investors make better trading decisions, particularly in the ever-changing financial markets.

Adam Mass

Adam Mass is the CEO of Forex89.com and a leading financial expert specializing in Forex trading and investment strategies. With extensive experience in global markets, he has built a reputation for providing in-depth market analysis and innovative trading solutions. Under his leadership, Forex89.com has become a trusted platform for traders seeking insights, education, and cutting-edge financial tools. Email: [email protected]