US Dollar vs Euro  2011 – 2020

EUR/USD is the most commonly traded currency pair by volume. The two currencies are in constant competition, and the main question that is on the table is which one of them is better and more secure.

The Euro is a rather young currency, that was introduced as an accounting currency in 1999, but physically was entered into circulation in 2002. That was the moment when the US Dollar, for the first time in its history, was shaken in its position as the world’s reserve currency, yet as of today made it to stay in this position.

EUR/USD – exchange volatility since 2011.

The biggest impact on the EUR/USD exchange rate has the US Federal Reserve. Therefor, it is the Fed’s actions that influence which of these currencies is more secure and profitable at a certain moment.

In 2011 Moody’s downgraded Greece’s debt rating even lower from the already junk rating it was previously applied, which inevitably led to the EURO slipping. The Greek issue is one of the key points affecting the currency value of the euro against the US dollar. The common plan of all eurozone countries does not allow to find an individual strategy for countries impacted by a crisis.

In December 2015 the Federal Reserve raised the interest rates for the first time in a decade, which raise led to the strengthening of the euro against the US dollar. A similar situation happened in 2017, when the European Central Bank (“ECB”) cut the bond buying program to 30 billion euros per month from 60 billion.

In 2018 and 2019 we could witness a reverse situation: ECB ended the “quantitative easing” stimulus program worth EUR 2.5, after which the ECB chief Mario Draghi announced the ECB would prepare to was preparing to bring down its interest rate due to the growth slow down; both facts could not but contribute to the weakening of the euro.

Currently the euro is strengthening its positions against the US dollar due to the reestablishment of the consumer confidence in Germany, and euro as such became a more profitable option in terms of investing.