Euro History – The Strict Binding With US
In the currency trading market, the EUR/USD pair is the most traded pair. Trillions of dollars are traded on a daily basis in this pair. This is because the Eurozone and the United States are the leading economies in the world. United States is the leading global economy while the European Union comes second. As a result, many investors base their transactions on the dollar and the Euro. A lot has been written on the Euro history. Many books have been published on the Euro history. Some of the books include: The Euro: The Battle for the New Global Currency by David Marsh, The Crisis and the Euro history by George Soros, Europe’s Orphan by Martin Sandbu, and The Guns of August by Barbara Tuchman. While many books predict the ultimate death of the euro, others paint a rosy future of the currency. The past of the Euro has not been promising against the dollar. The chart below shows the historical comparison between the dollar and the euro. To understand the future of the Euro, it is important to understand the current state if the European Union. European Union is made up of 28 countries. For a country to enter the union, it needs to go through a rigorous process. Greece was the last country to get into the union. Turkey has tried to get into the union for more than 10 years in vain. The main advantage of the European Union is that it allows member countries to have the access to the market. Companies in the union can trade in all member states. People from different countries can easily work everywhere without requiring a work permit. This removes many barriers that would be present if the countries were operating individually. Economists agree that the concept of the European Union is an excellent one albeit with a number of challenges. One of the challenges was recently witnessed when United Kingdom, which was one of the founding members of the Union decided to exit. The Brevity vote which was held a few weeks ago caught many unawares. Bookmakers made huge losses because not many people expected the UK to ‘betray’ the union.
Euro History – The Latest Years
Last year was also not an easy year for the Euro. The union faced a major challenge on the problems in Greece. Greece, the latest country to enter the Euro was/in huge debt. The union members were divided on whether to provide a bailout to the country or let it default it’s debt obligations. Had they taken the latter option, it would have been disastrous for the EU. Economists believed that other countries that are not doing very well such as Portugal and Italy would follow the footsteps if Greece and exit the Euro. The question many people are now pondering has to do with the future of the Euro. Will the currency survive the recent events? Will other countries follow in the footsteps of United Kingdom? In his address to the EU Parliament, the then defacto leader of the Brexit movement, Nigel Farage openly stated that Britain had led the way for other countries to exit. As for now, the member states are optimistic that they will fight the storm and that the Euro will emerge strong. Frankly speaking, the Euro history depends on a number of factors. One it’s leaders in Brussels need to come to terms that the world is changing. China has emerged as the second biggest economy in the world. It’s economy is doing better than what the European countries are doing. The future of the Euro will depend on how the member states will adopt to the new world order about China. Remember, EU companies are now facing stiff competition from their Chinese counterparts. Second, the future of the Euro will depend on the member countries. If the member countries decide to stick together, ease the regulations, and let individual countries make some decisions,the currency will go far according to Muhammed El Erian a senior economic it at Allianz and former investment head at PIMCO.