Euro Currency Guide: Euro (EUR)

Currency of 19 member countries of the European Union

Why does the euro move in value?

As the currency of three of the largest seven economies in the world – Germany, France and Italy – the euro is one of the most traded currencies in the world.

Policymakers and the financial authorities in the European Union (EU) and elsewhere can, to a limited extent, directly impact the strength of the euro. However, it is generally the rules of supply and demand from the currency markets, buying and selling euros in response to economic and political news, that moves exchange rates.

  1. Monetary policy: The European Central Bank sets monetary policy for the eurozone, controlling interest rates and “printing money” (they actually create money digitally) to stimulate the economy.
  2. Economic news: Currency traders analyse economic data as it arrives in order to gauge the success or otherwise of an economy. It isn’t random information, but very specific surveys both from government statisticians and trusted third parties. For the eurozone, data will cover both the area as a whole and its largest economies, with data from Germany especially important.
  3. Political news: Insofar as politics affects economic policy and governance of the eurozone, it is highly likely to have an influence on the strength of EUR. For example, elections in Germany and France, or the working of the EU in general such as during the Greek debt crisis, will all encourage either support or weakening of the euro.
EUR Euro
Currency code: EUR
Units: One euro = 100 cents (c)
Also known as: Varies by country, e.g. Ege (Finnish) and lero (Spanish)
Central bank: European Central Bank (ECB)

EUR is the currency of Austria, Belgium, Cyprus, Germany, Estonia, Finland, France, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Slovenia, Slovakia, Spain.

Spelling: Officially euro is used with a lower case “e” and is always singular. However, you will often see it spelled Euro and used as a plural “euros”.

Exchange rates: what is the euro’s value today?

The euro is the world’s second-most traded currency, after the US dollar (USD).

Currencies most commonly traded with EUR are:

What is the euro?

The euro was launched on 1 January 1999 in 11 countries of Europe and since extended to 19 of the 27 EU members.
Notes began being used in 2002, with the 11 countries’ old currencies becoming obsolete on 28 February 2002.

Although the notes are worth the same value and are accepted throughout the eurozone and beyond, each country prints a national version of the design.

EU countries that do not officially use the euro are Bulgaria, Croatia, Czech Republic, Denmark, Hungary, Poland, Romania and Sweden.

Control of EUR

The euro is a floating exchange rate against all but a few smaller currencies which are pegged to it. The euro’s value is dictated largely by the currency markets, where it is bought and sold by investors.

However, it is also influenced by the monetary policy decisions of the European Central Bank which sets interest rates and conducts open market operations to increase money in the economy.

For any questions on how to manage your currency risk, information on how to register or how to make a trade with us, please don’t hesitate to call our team on 0808 163 0102 between 8am and 6pm, Monday to Friday.

European Central Bank and monetary policy

President: Christine Lagarde

The ECB’s task is to keep prices stable within the euro area, which it currently targets at 2% inflation. It does this by controlling key interest rates and the money supply, via “main refinancing operations” (MROs). However it also takes a part in supporting the economies of its states, such as by stimulus measures during the Covid-19 pandemic.

Interest rates are voted on every six weeks and explained in a press conference afterwards.

Make a euro transfer today

Speak to Smart about your upcoming euro payments. We make payments to and from over 35 currencies worldwide, so whether you are buying or selling euros, we can help.