EUR/USD Currency Cross

What is the Euro to Dollar (EUR/USD)?

The Euro to Dollar exchange rate (EUR/USD or €/$ for short) is the number of U.S. dollars for every 1 Euro. It is the convention for quoting the exchange rate between the two currencies. This guide will provide an overview of the factors that impact the FX rate, and what investors and speculators need to know.

Examples of the Euro to Dollar Exchange Rate

Let’s look at an example of how to calculate the Euro to USD FX rate, and how to change between the two currencies.

Example 1:

Q: If the EUR/USD rate is 1.25 and an investor has 364 Euros, how many US dollars would they receive if they exchanged it at the current rate?

A: 364 EUR x 1.25 = 455 USD

Example 2:

Q: If the EUR/USD rate is 1.42 and an investor has 267 USD, how many Euros would they receive if they exchanged it at the current rate?

A: 267 USD / 1.42 = 188.03 EUR

Example 3:

Q: If an investor exchanges 796 USD into 610 EUR, what is the current exchange rate?

A: 796 USD / 610 EUR = 1.30 EUR/USD

Factors that impact the Euro to Dollar Exchange Rate

The exchange rate for the Euro to Dollar is impacted by many economic factorsEconomicsThe Euro to Dollar exchange rate (EUR/USD or €/$ for short) is the number of U.S. dollars for every 1 Euro. It is the convention for quoting the exchange rate between the two currencies.  This guide will provide an overview of the factors that impact the FX rate, and what investors and speculators need to know as well as political events on both sides of the Atlantic.  A summary of factors that impact each country is listed below.

Factors impacting the Euro:

• Countries that are included in the EurozoneEurozoneAll European Union countries that adopted euro as their national currency form a geographical and economic region known as the Eurozone. The eurozone forms (and changes to that list)
• European Central BankEuropean Central BankThe European Central Bank (ECB) is the central bank for all the European Union (EU) member states. The body has the responsibility to the euro... (ECB) monetary policy
• Employment rates, job creation, etc
• Budget deficits and national debt levels in Eurozone countries
• Domestic politics and international policies
• Economic growth in Eurozone countries
• Read more: history of the Euro

Factors that impact the Dollar:

• U.S. Gross Domestic ProductGDP FormulaThe GDP Formula consists of consumption, government spending, investments, and net exports. We break down the GDP formula into steps in this guide. Gross Domestic Product is the monetary value, in local currency, of all final economic goods and services produced within a country during a specific period of time (GDP) growth rates
• Interest rates set by the Federal Reserve (the “Fed”)
• Money supply set by the Fed
• Unemployment ratesCyclical UnemploymentCyclical unemployment entails layoffs, due to an economic recession or depression. Employees are able to reobtain their jobs once the economy expands again.
• Trade agreements, tariffs, and duties set internationally
• The balance of paymentsBalance of PaymentsThe Balance of Payments is a statement that contains the transactions made by residents of a particular country with the rest of the world for a specific time period. It is also known as the balance of international payments and if often abbreviated as BOP.  It summarizes all payments and receipts by account
• Total US national debt and annual budget deficits
• Events in the White House
• Consumer savings and household income rates
• Social security and Medicare

History of the Euro to Dollar Exchange Rate

The chart below shows the Euro to Dollar exchange rate during the past ten years, spanning from 2008 until 2018.  You will notice that the FX rate has ranged between 1.039 and 1.598 during that time period.

From 2008 to 2014 the Euro was rarely worth less than 1.3 US dollars, however, between 2014 and 2015 it dropped repetitiously all the way down to about 1.04.  For three years it remained relatively range bound between 1.04 and 1.15 until breaking out above 1.22 in early 2018.

Additional resources

Thank you for reading this guide to understanding the EUR/USD exchange rate, factors that influence it, and the history over the past 10 years.  To continue learning and advancing your career, these additional resources will be helpful:

• US to CAD Exchange RateUSD/CAD Currency CrossThe USD/CAD currency pair represents the quoted rate for exchanging US to CAD, or, how many Canadian dollars one receives per US dollar.  For example, a USD/CAD rate of 1.25 means 1 US dollar is equivalent to 1.25 Canadian dollars. The USD/CAD exchange rate is affected by economic and political forces on both
• Forex Trading GuideForex Trading - How to Trade the Forex MarketForex trading allows users to capitalize on appreciation and depreciation of different currencies. Forex trading involves buying and selling currency pairs based on each currency's relative value to the other currency that makes up the pair.
• Top Forex Trading Tips5-Step Guide to Winning Forex TradingHere are the secrets to winning forex trading that will enable you to master the complexities of the forex market. The forex market is the largest market in the world in terms of the dollar value of average daily trading, dwarfing the stock and bond markets.
• Financial Analyst CertificationFMVA™ CertificationThe Financial Modeling & Valueation Analyst (FMVA)™ accreditation is a global standard for financial analysts that covers finance, accounting, financial modeling, valuation, budgeting, forecasting, presentations, and strategy.