EURO History

It seems suitable to end this rather heavy segment on the EUR/USD currency pair with a little light history on the Euro. Almost all the other currencies on the Forex market – such as the Japanese yen (JPY) and the Pound Sterling (GBP) – have long and stories histories, but not the Euro. The currency itself came out of a political process to join all the European nations into one union (see how international politics can play such a large role in currency markets?). Naturally, once different European countries agreed to form into a single union, the European Union, a common currency was deemed not only sensible but necessary. And thus, the Euro was born. This took place in the last decade of the 20th Century. Of course, not all members of the European Union accepted the Euro as their currency. The largest holdout, of course, was the United Kingdom, which preferred to stick with their tried and true Pound Sterling. The countries that accepted the Euro as their new official currency designated the Eurozone.

It’s important to note that not all countries have to be part of the Eurozone in order to be an active player in the European Union. And over time – after more than a few attempts at resisting it – the Euro has grown to become the second largest currency in the world in less than two decades. Today, it accounts for 30% of all Forex market trades, second only to the US dollar. And there you have it: the ideal currency pairing of the Euro and US dollar was born: the powerful EUR/USD Forex market currency pair.

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In recent years, the Euro has climbed even higher. In 2008, there was a massive housing market collapse caused by frivolous loans and senseless mortgages. This led to a further devaluation of the US dollar.

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