Divergent expectations for inflation and interest rates between the eurozone and the US from last year continue into 2022.
But to be fair, the market’s expectation for a rise in US inflation and thus interest rates has pushed up the USD exchange rate against most currencies.
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In 2021 the Euro mostly dropped versus the greenback, except for Q2.
The euro (ISO: EUR) is involved in slightly more than 30% of all foreign exchange deals, and as such, is the world’s second most traded currency, behind the US dollar.
The euro is the currency of the eurozone (officially called the ‘euro area’), which consists of 19 of the 28 member states of the European Union, and is used by almost 350 million Europeans. It was introduced in January 1999.
Of all the thousands of exchange rates that exist in the world, the euro-to-US dollar exchange rate is the most actively traded, or most ‘liquid’.
Since its introduction, the euro’s lowest value against the dollar came in October 2000 when EUR/USD hit lows of 0.8231. The currency was strongest in July 2008, shortly before the worst stage of the 2007-2009 financial crisis, when EUR/USD reached 1.6038.
There are currently more than twenty nations and territories which peg their currencies to the euro, the largest of which is Denmark.
Disclaimer: Please note any provider recommendations, currency forecasts or any opinions of our authors should not be taken as a reference to buy or sell any financial product.