Euro
Currency

Overview

Euro was introduced as currency for 11 countries and was the biggest monetary transformation in the world economy.

Euro acquired a strong position in a short time and is now providing good competition such that it is threatening the United States dollar supremacy. The advantages are obvious as a single currency is being operated by various countries as it lowers the risks of exchange rates and in fact the financial markets are more flexible presenting price levels consistency and factors representing macroeconomic stability.

Euro is an official currency for the countries within the Euro zone and the others considering the same currency are Monaco, Kosovo, Vatican city, San Marino, Andorra and Montenegro.

International usage

The euro has been launched in 1999 and it replaced on 1 January 2201 12 currencies and replaced it with euro in places such as Montenegro and Monaco. These three states are issued formal rights to mint their coins.

These countries do not take participation in the Euro Group or in the European Central Bank.

Its international usage as trading currency has also grown strong and is acting as political or economic alternative to the United States dollar.

The increasing usage has led to the sense of becoming a significant challenger as the main reserve currency in the world surpassing US dollar.

Reserve currency status

Euro is a global reserve currency having U.S. dollar status and continues as the primary reserve in many commercial and central banks. This is the second prominent reserve currency after U.S. dollar.

Euro acquired this status since its introduction and has maintained its standing. There are all chances of it acquiring the position of being the first international reserve currency or be traded equally.

The recent US dollar weakness has given ways to encourage the euro reserve. In 2007, second term euro reserve currency reached 25.6% showing 0.8% more than the earlier year while US dollar presented a drop to 64.8% representing 1.3% down than the earlier ear.

The shares of euro by the 2007 end increased to 26.4% and the dollar slumped to 63.8 and this was the lowest since it initiated in 1999.