Euro is the second most traded currency on the FX market, only the United States Dollar is traded more. Data obtained by the 2013 Triennial Central Bank Survey show that the Euro was included in 33 percent of all FX transactions for the year 2013. Together, the EUR and the USD forms the most traded currency pair in the world. For the year 2013, the EUR/USD currency pair comprised right under 25% of the total FX trade.
The Euro is sold freely on the FX market and its value fluctuates in relation to other major currencies. During the period 2010 – 2015, the Euro lost a lot of value against currencies such as the USD, GBP and JPY. For the year 2008, the average exchange rate was 1.60 USD for 1 EUR. By March 2015, you only got 1.06 USD for 1 EUR.
Monetary policy
The central bank for the Euro is the European Central Bank (ECB) in Frankfurt. In its monetary policy, ECB has so far focused chiefly on keeping very low interest rates.
Printing of Euro bills and minting of Euro coins
The printing of Euro bills and minting of Euro coins falls under the auspices of the Eurosystem. The Eurosystem is made up by the central banks of the countries that comprise the Eurozone.
The central banks of countries and territories that have Euro as their official currency without being included in the Eurozone are not included in the Eurosystem.
Where is Euro the official currency?
The Euro is the official currency for the Eurozone. At the time of writing, the Eurozone is made up by 19 members of the European Union, which means that nine members of the European Union are not a part of the Eurozone.
According to the Maastricht Treaty of 1992 (Treaty on European Union), a membership state must adopt the Euro as their official currency as soon as the membership state fulfills certain criteria. Of the nine EU membership states that have not adopted the Euro as their official currency, two have negotiated exceptions from this obligation. These two are Denmark and the United Kingdom, which do not have to adopt the Euro as their official currency even if they fulfill all the criteria. Sweden has negotiated no such exception, but after a referendum where the Swedish voters said no to the Euro, the Swedish government is deliberately making sure not to meet the criteria.
In addition to the 19 members of EU that have the Euro as their official currency, there are a handful of nations and territories outside of EU that has adopted the Euro as their official currency, or use it as their de facto currency, without gaining the right to be included in the Eurosystem. Most of these nations and territories are located in Europe and have very strong trade relations with the European Union. Examples of such nations and territories are Monaco, Montenegro, Kosovo, Andorra, San Marino, Vatican City, and the Sovereign Base Areas of Akrotiri and Dhekelia (a British Overseas Territory on the island of Cyprus).
Examples of nations and territories outside Europe where Euro is the official or de facto currency are Clipperton Island (an overseas minor territory of France under direct authority of the Minister of Overseas France), the Territorial collectivity of Saint-Barthélemy (a French Overseas Collectivity), Saint-Pierre-et-Miquelon (a French Overseas Collectivity), and Territory of the French Southern and Antarctic Lands (an overseas territory of France).
The Eurozone
- Austria
- Belgium
- Cyprus
- Estonia
- Finland
- France
- Germany
- Greece
- Ireland
- Italy
- Latvia
- Lithuania
- Luxemburg
- Malta
- The Netherlands
- Portugal
- Slovakia
- Slovenia
- Spain
Trivia
- The Euro is the official currency for the Eurozone and it is a very young currency. It was introduced as an electronic unit of account on January 1, 1999. Back then, it was called the European Currency Unit (ECU) and not yet recognized as a full currency. It only existed electronically, there were no coins or bills.
- The first physical Euro bills and Euro coins were released into circulation on January 1, 2002.
- There has never been a gold standard or similar for the Euro.
- The total value of Euro coins and Euro bills in circulation in August 2014 was €995 billion. (The total value of all USD coins and USD bills in circulation at the time was less than this.)
- The ISO-4217 currency code for the Euro is EUR.
- The symbol for the Euro is €. According to the European Commission, the symbol was inspired by Epsilon, the fifth letter of the Greek alphabet. The two parallel lines are supposed to denote the stability of the Euro.
- 1 Euro is equal to 100 cents.
- The Euro has become a very popular reserve currency world-wide. Only the United States Dollar is more popular for currency reserves than the Euro.
- The Euro is one of the currencies that make up the currency basket used by the International Monetary Fund (IMF) to calculate the value of IMF:s special drawing rights. (The other three currencies are USD, GBP and JPY.)