This euro to dollar site has been developed for both traders and non traders as a resource to explain the euro to dollar exchange rate both as an instrument for trading and also to highlight and give a view as to the short, medium and long term direction for the pair, regardless of whether you looking to exchange currency either for personal or business use. As forex traders already know the euro to dollar is the most widely traded of the major pairs in the forex markets given that the pair represent the two largest global economies, namely the US and the Eurozone.
The euro became an official unit of exchange on January 1 1999 for 11 nations: Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Portugal and Spain but was not yet legal tender. Four days later it was quoted for the first time on the forex markets and ended the trading day at 1.1837 USD but by 26 October 2000 the euro has fallen to an all time low of 0.8230 against the US dollar.
On 1 January 2001 Greece too adopted the euro, becoming the eurozone’s 12th member although it was not until January 1st 2002 that euro notes and coins were introduced across the 12 states thereby becoming legal tender and finally replacing individual, national currencies.
2007 saw Slovenia (the first former communist country) enter the eurozone, less than 3 years after joining the European Union.
On 1 January 2008 Malta and Cyprus were admitted to the eurozone and on 15 July 2008 the euro hit a record high of 1.6038 against the US dollar, against the backdrop of the start of the present financial crisis, global recession and market correction.
January 2009 saw Slovakia, another former Eastern bloc state, join the eurozone as the global financial crisis started to bite.
By December 2009 the euro was once again under scrutiny as the sovereign debt of some eurozone members (notably Greece and Ireland) came to light and the euro started to tumble against the US dollar at an alarming rate as the ECB (European Central Bank) and eurozone politicians held crisis talks in May 2010 and agreed a massive bailout plan for Greece with input from the IMF. This was the first real test for the euro and many market analysts were openly discussing its imminent collapse and demise. However, the markets were temporarily reassured and the euro steadied before falling to a fresh low of 1.1876 during June 2010 – a level not seen since 2006.
Since this low the euro to dollar has bounced back strongly as it now begins to approach an area of deep price congestion on the daily chart. Whether this recovery continues in the longer term or is merely a technical correction only time will tell. It is interesting to note that in the last few weeks such worthy commentators at Deutsche Bank have postulated that the euro is forecast to fall back towards parity against the US dollar within the next 18 months. From a technical perspective this seems increasingly likely once the current reversal has petered out which seems to be happening at present as the rate approaches USD1.35 and beyond. The monthly chart for the euro to dollar is also mirroring this view as the pair begin to run into the price resistance sitting at the 9 month moving average which may block this current short term rally. The longer term outlook for the euro to dollar remains heavily bearish and with the ongoing fundamental picture as a backdrop the euro will almost certainly decline in the medium term.
A daily analysis of the euro to dollar is posted on the euro vs dollar site.
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