Currency Pair: EUR USD Euro U S. Dollar Definition and History

The pair represents a combination of two of the biggest economies in the world. It is affected by factors that influence the value of the euro and the U.S. dollar in relation to each other and to other currencies. The Currency Pair EUR/USD is the shortened term for the euro against U.S. dollar pair, or cross for the currencies of the European Union (EU) and the United States (USD). The currency pair indicates how many U.S. dollars (the quote currency) are needed to purchase one euro (the base currency). Trading the EUR/USD currency pair is also known as trading the “euro.” The value of the EUR/USD pair is quoted as 1 euro per x U.S. dollars. For example, if the pair is trading at 1.50, it means it takes 1.5 U.S. dollars to buy 1 euro.

1. The euro has eliminated the costs of currency movements within the euro area and protected European consumers and businesses from costly swings in currency markets, which in some countries, used to undermine confidence, discourage investment and cause economic instability.
2. Although all EU countries are part of the Economic and Monetary Union (EMU), 20 of them have replaced their national currencies with the single currency – the euro.
3. The ECB is part of the European System of Central Banks (ESCB) along with the national central banks of all the EU member states, including those that have not adopted the euro.
4. The Currency Pair EUR/USD is the shortened term for the euro against U.S. dollar pair, or cross for the currencies of the European Union (EU) and the United States (USD).

The proportion of international payments made in euros and US dollars is roughly equal and the euro is the world’s second favourite currency for borrowing, lending and central bank reserves. The rates were determined by fxprimus review the Council of the European Union,[f] based on a recommendation from the European Commission based on the market rates on 31 December 1998. They were set so that one European Currency Unit (ECU) would equal one euro.

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All EU Member States, except Denmark, are required to adopt the euro and join the euro area, once they are ready to fulfil them. Although €100, €200 and €500 notes are also available, they aren’t commonly accepted retailers. Create a chart for any currency pair in the world to see their currency history. These currency city index reviews charts use live mid-market rates, are easy to use, and are very reliable. The currency is also used officially by the institutions of the European Union, by four European microstates that are not EU members,[7] the British Overseas Territory of Akrotiri and Dhekelia, as well as unilaterally by Montenegro and Kosovo.

These countries generally had previously implemented a currency peg to one of the major European currencies (e.g. the French franc, Deutsche Mark or Portuguese escudo), and when these currencies were replaced by the euro their currencies became pegged to the euro. Pegging a country’s currency to a major currency is regarded as a safety measure, especially for currencies of areas with weak economies, as the euro is seen as a stable currency, prevents pepperstone canada runaway inflation, and encourages foreign investment due to its stability. The euro was established by the provisions in the 1992 Maastricht Treaty. In the Maastricht Treaty, the United Kingdom and Denmark were granted exemptions per their request from moving to the stage of monetary union which resulted in the introduction of the euro. The euro is the official currency of the European Union (EU), adopted by 19 of its 27 member nations.

It is the world’s second most popular reserve currency after the U.S. dollar, and the second most traded. Value of Obsolete National CurrenciesEuro bank notes and coins began circulating in 2002 with old notes and coins gradually being withdrawn from circulation. The precise dates that each old currency ceased being legal tender and their official fixed rates are shown in the table below. The euro has eliminated the costs of currency movements within the euro area and protected European consumers and businesses from costly swings in currency markets, which in some countries, used to undermine confidence, discourage investment and cause economic instability. The most obvious benefit of adopting a single currency is to remove the cost of exchanging currency, theoretically allowing businesses and individuals to consummate previously unprofitable trades.

Supporters of the euro argued that a single European currency would boost trade by eliminating foreign exchange fluctuations and reducing prices. Britain and Sweden delayed joining, though some businesses in Britain decided to accept payment in euros. Voters in Denmark narrowly rejected the euro in a September 2000 referendum. Greece initially failed to meet the economic requirements but was admitted in January 2001 after overhauling its economy.

Historical Exchange Rates For Euro to United States Dollar

On the other hand, the eurozone brought together economies with disparate characteristics and national budgets without the authority for the sort of cross-border fiscal transfers that take place between the U.S. federal government and U.S. states. As of March 26, 2018, 19 of the 28 member countries of the European Union use the euro. According to the ECB, as of January 1, 2017, more than €1 trillion are in circulation in the world. The euro is represented in the Unicode character set with the character name EURO SIGN and the code position U+20AC (decimal 8364) as well as in updated versions of the traditional Latin character set encodings.[a][b] In HTML, the € entity can also be used.

Obliged to adopt the euro

These are countries where the euro has still not been adopted, but who will join once they have met the necessary conditions. Mostly, it consists of countries of member states which acceded to the Union in 2004, 2007 and 2013, after the euro was launched in 2002. Currently close to four out to five (78%) citizens of euro area countries believe that the euro is good for the EU. We keep an eye on and report on the use of the euro outside the euro area. We are developing future banknotes to make them even more secure, sustainable and relatable to Europeans of all ages and backgrounds.

For consumers, banks in the eurozone must charge the same for intra-member cross-border transactions as purely domestic transactions for electronic payments (e.g., credit cards, debit cards and cash machine withdrawals). In English the euro sign – like the dollar sign ⟨$⟩ and the pound sign ⟨£⟩ – is usually placed before the figure, unspaced,[14][15] the reverse of usage in many other European languages. When written out, “euro” is placed after the value in lower case; the plural is used for two or more units, and euro cents are separated with a point, not a comma as in many countries (e.g., €1.50, 14 euros).

The euro is managed and administered by the European Central Bank (ECB, Frankfurt am Main) and the Eurosystem, composed of the central banks of the eurozone countries. As an independent central bank, the ECB has sole authority to set monetary policy. The Eurosystem participates in the printing, minting and distribution of euro banknotes and coins in all member states, and the operation of the eurozone payment systems. Unlike most of the national currencies that they replaced, euro banknotes do not display famous national figures. The seven colourful bills, designed by the Austrian artist Robert Kalina and ranging in denomination from €5 to €500, symbolize the unity of Europe and feature a map of Europe, the EU’s flag, and arches, bridges, gateways, and windows. The eight euro coins range in denominations from one cent to two euros.

To future-proof our money, we are also preparing for a possible digital euro. It would be like cash, but digital – allowing you to make and receive payments online and offline across the euro area, without additional costs. Compare our rate and fee with our competitors and see the difference for yourself. Check live rates, send money securely, set rate alerts, receive notifications and more. The Xe Rate Alerts will let you know when the rate you need is triggered on your selected currency pairs.

Currently, the euro (€) is the official currency of 20 out of 27 EU member countries which together constitute the Eurozone, officially called the euro area. Since the euro was introduced in 1999, the average income in the euro area (EA19) has risen from € 20,900 to €33,230 (2020). Over the same time, the percentage of people in employment has risen from 63.6% to 71.8 (2020) %.

Denmark has negotiated exemptions,[18] while Sweden (which joined the EU in 1995, after the Maastricht Treaty was signed) turned down the euro in a 2003 non-binding referendum, and has circumvented the obligation to adopt the euro by not meeting the monetary and budgetary requirements. All nations that have joined the EU since 1993 have pledged to adopt the euro in due course. The Maastricht Treaty was amended by the 2001 Treaty of Nice,[19] which closed the gaps and loopholes in the Maastricht and Rome Treaties.