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Euro to dollar today: Today, the euro is worth more than it was a year ago, but it’s also worth less. That makes EURUSD a wobbly currency in today’s world: Every euro is valuable because of how many other currencies are worth less.
Let’s see why and how you can profit if you know what you’re doing.
EURUSD fluctuates daily, driven by the European Central Bank’s interest in keeping inflation low and steady.
In January 2017, the ECB announced that it will begin phasing out its €60 billion per month stimulus program to help bring down the cost of borrowing money from banks.
That resulted in higher interest rates for consumers and businesses, which caused the value of the euro to decrease against other currencies as well as other commodities like gold and oil.
All currencies have their own set of pros and cons, so we’ll take a look at all three here so you can make an informed decision about your long-term strategy:
Euros vs Dollars Today: What’s the Exchange Rate?
As of today, the Euro is worth $1.33. This means that you will need around $130 to buy one Euro. That’s how much the common European currency has dropped against the U.S. dollar in the last 12 months alone! The Euro has been experiencing a downward slide since last summer, and it’s only getting worse from here on out. But why? What Causes Currencies To Surge Or Collapse? The answer lies in supply and demand: when there is more demand for a particular currency than supply, prices rise. If demand goes down, prices fall. Let’s take a look at what causes currencies to rise or fall…
Deposits And Withdrawals
Before we get into the specifics of why the Euro is falling against the dollar, let’s talk about how the Euro converts into U.S. dollars. There are two main ways to get Euros: you can either deposit Euros with a bank or exchange other currencies, like dollars. If people begin withdrawing money from banks and exchanging their Euros for dollars, this would make the Euro more expensive against the dollar. In theory, this would make it a good time to buy Euros—they would be more expensive because people would be taking their money out of the country. But even if people withdraw hundreds of millions of Euros from their savings accounts, the central bank can purchase the same amount at the same time with its own money. A reduction in demand for Euros would offset the effect of lower withdrawals.
Eurozone Events
With the Euro losing value against the Dollar, it makes sense that the currency would be affected by events happening in Europe. But instead, the Euro has been affected by events happening in America. In the last few months, the U.S. government has been in a state of political gridlock. It was a year ago that the Republican-controlled House of Representatives failed to pass a budget, leading to a government shutdown. This led to the longest federal government shutdown in American history, which in turn led to a sharp decline in the Euro.
New Currencies Are Launched
Another way that currency prices can change is by the addition of new currencies. But don’t get too excited! The Euro isn’t going away anytime soon. There are two main benefits of the Euro. One is that there is no longer a strong incentive to create a new currency, like there was in the early 2000s when people were concerned about the stability of the U.S. dollar. The other is that it might encourage people to deposit more money in Euro accounts, which would help stabilize the currency.
Exchanges Between Currency Types
You can also change the value of your currency by exchanging it for another kind of currency. For example, if you have euros, you can exchange them for dollars, pounds, or other currencies. This can help you avoid currency fluctuations, but it’s not advisable to exchange your entire stash of Euros for another currency, especially if you don’t have any dollars to exchange with. The exchange rate is constantly changing and you don’t want to be left with worthless money.
Supply and Demand
The best way to understand the value of a currency is to look at supply and demand. Imagine that there are three economists—one bullish, one bearish, and one balanced. All three economists agree that the current price is $1. Now, the bullish economist says that people want $2 and that the government will print more money to meet this demand. The bearish economist says that people don’t want $2, so the government should stop printing money. The balanced economist says that there is only so much demand for money, and the government should print just enough money to meet this demand. Who decides which economist gets the $2? It’s all about supply and demand. The bullish economist is bullish because there are two other economists who are bullish. The bearish economist is bearish because there are two other economists who are bearish. The balanced economist is balanced because there are two other economists who are balanced. So who gets $2? The government. If the government prints more money and people want to exchange Euros for dollars, then this is the place to exchange your Euros for dollars.
Conclusion
The Euro is having a rough time these days, and there are a few different factors causing this. One reason is that there was a lot of political gridlock in the U.S. that led to people withdrawing money from their accounts. Another reason is the Euro’s relatively high value against the dollar compared to other currencies. Finally, the Euro has a lot of competition—China, Russia, Japan, and others—so its value is in danger of being affected by large changes in supply and demand. If you’re wondering whether you should buy Euros or not, don’t worry too much. The Euro is only in danger of collapsing, and the best advice is to be cautious and only invest money that you are willing to lose.
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