The pound rocketed on Wednesday, striking a new six-week high against the US dollar amidst renewed hopes for a UK-EU Brexit trade deal.
Key EUR/USD exchange rate information
Every day people use the EUR/USD exchange rate to send funds from countries within the Eurozone to friends, relatives, or their own personal accounts, in the United States.
Facts about the EUR/USD exchange rate
The EUR/USD exchange rate has experienced strong fluctuations since the onset of the global financial crisis in 2008. The highest levels seen for the euro against the US dollar were reached in the months leading up to the collapse of Lehman Brothers, but numerous crises in the Eurozone have dragged EUR exchange rates lower overall.
- In the last ten years, the highest EUR/USD exchange rate recorded was $1.5975.
- The worst level seen for EUR/USD in the same period was $1.0391, which was struck a few days after the US Federal Reserve hiked interest rates for the first time in a year.
Information on the euro and US dollar
Because the euro is a currency used by 19 separate nations (a number that is likely to grow over the years if European integration plans are further developed) it’s often referred to as the ‘common currency’ or the ‘shared currency’.
The US dollar, meanwhile, is most commonly nicknamed the ‘Buck’ or the ‘Greenback’. US paper money is available in denominations of $100, $50, $20, $10, $5, $2 and $1. Coins are available in denominations of $1, 50¢, 25¢, 10¢, 5¢.
What influences EUR/USD exchange rate movement?
Both the euro and US dollar are heavily influenced by the outlook for monetary policy in the Eurozone and US.
The Federal Reserve and the European Central Bank (ECB) were forced to drastically cut interest rates and implement quantitative easing to combat the impact of the financial crisis, actions that weakened their respective currencies.
Signs that central bankers belonging to either economy are looking to reign in their monetary stimulus programmes and gradually return policy to pre-crisis levels therefore have a significant impact on EUR/USD exchange rate movement.
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