Background and Data:
The euro (€) is the official currency of the Eurozone, which consists of 17 EU member states using this currency. The euro is also the 2nd largest reserve currency as well as the 2nd most traded currency in the world after the United States dollar. As of November 2013, with more than €951 billion in circulation, the euro has the highest combined value of banknotes and coins in circulation in the world, having surpassed the U.S. dollar. The US dollar ($) is the official currency of the United States and its overseas territories. Just like the euro there are other currencies pegged to it, such as the Bermudian Dollar. The US dollar is the fiat currency most used in international transactions and is one of the world’s most dominant reserve currencies.
After the 2008 market crash the exchange rate between the US Dollar and the Euro has been increasing. While the Euro continues to gain value, the US Dollar has yet to fully recover the value it had before the market crash. As seen in figure 7 it costs more US dollars to buy 1 Euro than it has in the past two years. Figure 8 shows that the US dollar has depreciated against the Euro but has appreciated against the Pound Sterling, the Australian dollar, and the Canadian dollar.
Simple Synopsis of Article: After a European Central Bank official said that the Euro, European money, showed no signs of its price falling, the US Dollar reached the lowest level it has been against the Euro for the past 2.5
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dollar was close to an eight year shortage against the real, having lost more than 33% of its value during 2009 alone. During the past 12 month era, the exchange rate of the U.S. dollar (USD) has diverse from a low of BRL R $1.5310 to in height of BRL $1.7790. During 2010, the United States dollar typically kept an everyday exchange rate between (BRL) R$1.70 and (BRL) R$1.80, occasionally reducing below the (BRL) R$1.70 level.
Another impact the euro could have on the American economy is by effecting the exchange rate of the dollar. Although there is great potential for the euro to have a positive impact on American business, there still is much uncertainty regarding the long-term effect it will have on the dollar's role as the world's dominant currency. Federal Reserve chairman Alan Greenspan in his remarks on the euro on November 30, 2001 states that, "clearly the
The US dollar is used in the majority of the international transactions and therefore that happens to the American economy, will influence the international financial resources. Dollars bring big consequences both for the USA and for other countries. The economy of many countries depends on currency dollar. The increase in its course reduces the volume of the income in dollars for the country. And change of US dollar more considerably, than change of an exchange rate of the country. On the
As of 2012, only seventeen of members of the European Union have decided to use Euros as their currency. In order for the members that adopted the Euro as their currency to successfully help their economic problems, the Eurozone members had to follow strict instructions put into place the European Union. The strict policies included strict control over inflation, government debt, and long-term interest rates (Mckee 525). The union put these strict policies into place to give the union the tools that it needed to take in order to help fix the economic crisis in each country participating in the Eurozone. Without the full cooperation of each country, it could cause the plans to fix the economic crisis within each country to fail because of the different interests by each individual country.
The U.S. dollar peaked in value in 2000-2001 and has been in a significant decline ever since. There was a relatively brief period in 2008 when the dollar rebounded quite sharply due to the worldwide financial crisis and economic meltdown, when there was a global rush to the safety of U.S. treasury securities. But since then, the dollar has resumed its long-term downtrend. In the recent years the dollar has been improving relative to other currencies, becausee of the decline in those other currencies.
The euro is not the currency of all EU Member States. Two countries (Denmark and the United Kingdom) have ‘opt-out’ sections in the Treaty excusing them from involvement, while the rest (numerous of the more recently agreed EU members plus Sweden) have yet to meet the situations for approving the single currency.
According to Bradley Schiller, a United States economist, when the Euro was first implemented by the United Nations in European countries, the dollar bill was worth approximately 1.10 Euros. But with the increase in national debt and monetizing, inflation has caused the dollar to plummet to a measly .64 Euros. That’s almost half of what it was worth before! A normal European hotel room could dent
The financial crisis of 2008 has been described as the worst financial crisis the world has seen since the great depression, but there are now murmurings of the potential for an even greater financial crisis, a currency crisis, caused by the demise of the US Dollar. The Dollar has been the reserve currency of the world since it took over from the Pound at the end of world war two, but we examine if it is about to crash spectacularly?
Strong is good. Weak is bad. These generalizations sound simple enough, but they can be very confusing when come to money. Is a "strong" U.S. dollar always good? Is a "weak" dollar always bad? Understanding of it is a necessary in marketplace. The term such as “Strong” and “weak” dollar is a “hot topic” which always bandied about by economist on a daily basis and also public. This issue is so important to almost every one. It seems like part and parcel of people who very concern about currency likes investors, economist, foreigners who study or working in the United State and so on.
As the worlds most dominate currency, the USD hold to large advantages of being currency reserved. Each dollar stockpiled and bought in non-US countries is one dollar that the US citizens gave that purchases power against other nations for free. The status of being the main world international trade
From the ancient period, the United States of America grew on pillars set by men with philosophy in the occult. For instance, the members of Freemasonry and those from the other secret societies; that saw the potential in the U.S is the New Jerusalem. They foresaw the United States future as a beacon as compared to the other nations in the world, guiding the globe in the formation of the admired New World Order of enlightenment, peace and democracy. Many people would today agree with the fact that the U.S indeed in different ways is fulfilling its set role already. If nothing else attached to this, most people around the world would agree that the American dollar dominates the world financially, and among the world currencies, the dollar is the King.
There are many reasons why the dollar would fluctuate. The strength and weakness of a dollar depends on a number of factors such as inflation and trade deficits. To save the economy from inflation, the Federal Reserve will increase interest rates causing the economy to slow and the value of the dollar to decrease. Trade deficits can also devalue the US dollar. Although the high trade deficit is causing the dollar to fluctuate, the deficit could be a way to make the dollar stronger. Because we are borrowing from other countries, with our interest rates being higher, they would want to buy the US dollar to invest in the interest rate market.
Deutsche Bank (Karczmar, 2004) suggests that the euro could eventually challenge the dollar as a reserve currency, but the euro is still far behind the U.S. dollar as a reserve currency, representing just 24.2 percent of the world banking reserves in the 2013 third quarter (International Monetary Fund, 2013). Numerous economists endorse the United States’ ability to safely continue its external deficits. Cooper (2001) poses the argument in its simplest form:
But the Euro is not just a currency, it’s an expression of a political ideal. The main architects of the Euro Zone were the German chancellor Kohl and the French president Mitterrand: when in 1990 West Germany and East Germany wanted to reunite, the USA and the Soviet Union were favorable, whereas Britain and France feared a new German dominance would begin, so they suggested to put the new re-unified German economy under European control, thus the idea for the