EUR/USD is the world’s most heavily traded currency pair. This article explores the history of its European half – including why the euro was created, who uses it, and how its price against the US dollar has changed over time.
|Member state||Previous currency|
|The Netherlands||Dutch guilder|
|San Marino||Sammarinese lira|
|Vatican City||Vatican lira|
Physical euro bank notes and coins weren’t introduced until three years later – on 1 January 2002 – and countries continued to use their existing bank notes until the changeover period began.
The euro was introduced to create an economic and monetary union. The primary aim was to reduce the costs and risks associated with cross-border transactions. Wider aims included promoting economic growth, employment and price-parity across Europe.
The idea of a single European currency was touted throughout the sixties and seventies, as turbulent currency markets threatened the key economic agreements of the European Economic Community (EEC).
The group responded by tying their currencies to a new European currency unit (ECU), a digital currency whose value was based on a basket of European currencies. The convergence of monetary policy under this system brought many economic benefits, and increased calls for a true single currency.
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