USD/EUR FX rate, up until Jun 21, 2023

The USD to EUR exchange rate in 2022 roughly 30 percent higher than it was in 2012, revealing a very strong dollar against the euro. The value of 0.91 euros per dollar was noticeably higher than the 2016 peak of 0.95 euros per dollar, but still above the price before the Eurozone Crisis. This started in 2009 and was caused by difficulties of several European countries with repaying government debt.

What does the exchange rate mean?

At any single point in time, an exchange rate is simply a measure of the value of one currency in terms of another. However, when the exchange rate shifts, one currency gets 'stronger' and the other 'weaker'. This is particularly important in international trade. A strong currency makes imports cheaper, so one could expect the trade balance of a country with a strong currency to decrease. In such a way, a strong currency would hurt a country with a high trade surplus.

Exchange rate investments

There is a financial market built around currency fluctuations. The foreign exchange market, or forex market, has a daily turnover of trillions of dollars. This market is critical for international trade, but many investors simply use it to speculate.