U.s. Dollar Euro Exchange Rate

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Introduction An analysis involving the U.S. dollar-euro (USD-EUR) exchange rate involves an in-depth study on the exchange rate between the two currencies. The U.S. dollar-euro exchange rate in the past was the most analyzed subject studied in global economics. However, any results attempted in studying the dollar-euro exchange rate has not been that successful in the past. This is due to researchers not being able to make a connection between the fundamentals of macroeconomics and exchange rates (Molodtsova, Nikolsko-Rzhevskyy, & Papell, 2011). For this purpose, this paper will discuss where the U.S. dollar-euro exchange rate has been in the past, where it is in the present, and where it is expected to be at in the future? The Past of the U.S. Dollar-Euro Exchange Rate Where the U.S. dollar-euro exchange rate has been in the past several decades from 1999-2014 is as follows. Ever since the euro was created in January of 1999, the value of it has equaled to $1.17. In October of 2000, the dollar was gaining strength when the euro was just $0.88. Afterwards the dollar continued to decline against the euro by 39% from 2001 to 2004 (Islam, 2005). However, in 2005 the dollar rose, but negative outlooks began to occur during the Great Recession in 2006. As the dollar started to decline in 2006 before the subprime mortgage crisis, capital flows caused more volatility in dollar-euro exchange rate market forcing individuals to deal with this economic situation (Harvey,
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