Euro is known as the most used currency worldwide because it is used by 327 million Europeans. It came into existence in 1992 through Maastricht Treaty after the formation of European Union. Aside from that only European countries were the ones authorized to use Euro and their budget should be lower than 3% GDP and 63% less GDP.
In 2002, Euro became a single currency of 12 member states of EU.Sixteen countries more added up to the list which uses Euro after the biggest monetary event that has ever recorded. This was a move that was aimed at political solidarity but also helped poorer European countries to develop economically as by using Euro, these countries were protected from violent fluctuations in the exchange rates of their currencies as they now depended upon euro exchange rate.
Tourists suffered as during their travel in several countries across Europe, they had to exchange their currency several times which cost them dearly.
Furthermore, using only one currency has aid businesses because rates are transparent as well as variability in exchange rates.Another advantage is that inhabitants from another country can work from one country to another and still receive that same rate of Euro.
Before the introduction of Euro, US dollar was the prime currency of the world. Starting, Euro can go over USD thus Euro exchange rates had to go through hard times on that previous years. But soon, Euro started to push US dollar and a long period of stable upward movement of Euro against US dollar was witnessed.
At present Euro has become constant and has bigger rates compare to US dollars. US dollar and Euro costs approximately half of the Forex trade.
Euro rates of exchange are as important for forex traders today as US dollar, and in some ways these exchange rates are a reflection of the economic development that has taken place in the member states of the European union though there are also strange cases of countries like Ireland, Greece and Portugal that are on the brink of disaster despite being in the EU fold.
Hence news can affect the exchange rates of Euro and its countries.During the time when Greece are experiencing depression in year 2010, euro drop 14 month low rate against US dollars.This sensitivity of Euro exchange rates continues to prevail in the Forex market and it has also caused substantial gains for Euro in a single day on occasions.
Posted by moneythoughts11
at 7:12 AM EDT