EUR/USD Exchange Rate: A Comprehensive Guide

The Euro to Dollar exchange rate (EUR/USD or €/$ for short) is the amount in U.S. dollars that equals 1 Euro. It is the convention for quoting the exchange rate between the two currencies. This guide will provide an overview of the factors that impact the FX rate, currency riskCurrency RiskCurrency risk, or exchange rate risk, refers to the exposure faced by investors or companies that operate across different countries, in regard to unpredictable gains or losses due to changes in the value of one currency in relation to another currency., and what investors and speculators need to know.

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Examples of the EUR/USD Exchange Rate

Let’s look at an example of how to calculate the Euro to Dollar FX rate, and how to change between the two currencies.

Example 1:

Q: If the EUR/USD rate is 1.25 and an investor has 364 Euros, how many US dollars would they receive if they exchanged it at the current rate?

A: 364 EUR x 1.25 = 455 USD

Example 2:

Q: If the EUR/USD rate is 1.42 and an investor has 267 USD, how many Euros would they receive if they exchanged it at the current rate?

A: 267 USD / 1.42 = 188.03 EUR

Example 3:

Q: If an investor exchanges 796 USD into 610 EUR, what is the current Euro to Dollar exchange rate?

A: 796 USD / 610 EUR = 1.30 EUR/USD

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Factors that Impact the Euro to Dollar Exchange Rate

The exchange rate for the Euro to Dollar is impacted by many economic factors,EconomicsCFI's Economics Articles are designed as self-study guides to learn economics at your own pace. Browse hundreds of articles on economics and the most important concepts such as the business cycle, GDP formula, consumer surplus, economies of scale, economic value added, supply and demand, equilibrium, and more as well as political events on both sides of the Atlantic.  A summary of factors that impact each country is listed below.

Factors impacting the Euro side of Euro to Dollar:

• Countries that are included in the EurozoneEurozoneAll European Union countries that adopted the euro as their national currency form a geographical and economic region known as the Eurozone. The Eurozone forms one of the largest economic regions in the world. Nineteen of the 28 countries in Europe use the euro (and changes to that list)
• European Central BankEuropean Central Bank (ECB)The European Central Bank (ECB) is one of the seven institutions of the EU and the central bank for the entire Eurozone. (ECB) monetary policy
• Employment rates, job creation, etc.
• Budget deficits and national debt levels in Eurozone countries
• Domestic politics and international policies
• Economic growth in Eurozone countries
• Read more: history of the Euro

Factors that impact the Dollar side of Euro to Dollar:

• U.S. Gross Domestic ProductGDP FormulaGross Domestic Product (GDP) is the monetary value, in local currency, of all final economic goods and services produced in a country during a (GDP) growth rates
• Interest rates set by the Federal Reserve (the “Fed”)
• Money supply set by the Fed
• Unemployment ratesCyclical UnemploymentCyclical unemployment is a type of unemployment where labor forces are reduced as a result of business cycles or fluctuations in the economy,
• Trade agreements, tariffs, and duties set internationally
• The balance of paymentsBalance of PaymentsThe Balance of Payments is a statement that contains the transactions made by residents of a particular country with the rest of the world account
• Total US national debt and annual budget deficits
• Events in the White House
• Consumer savings and household income rates
• Social Security and Medicare

History of the Euro to Dollar Exchange Rate

The chart below shows the Euro to Dollar exchange rate during the past ten years, spanning from 2008 until 2018.  You will notice that the FX rate has ranged between 1.039 and 1.598 during that time period. That range is basically from near parity – almost a 1:1 exchange rate – to approximately $1.60.

From 2008 to 2014 the Euro was rarely worth less than 1.3 US dollars, however, between 2014 and 2015 it dropped all the way down to about 1.04.  For three years, the FX rate remained relatively range bound between 1.04 and 1.15 until breaking out above 1.22 in early 2018.

Additional Resources

Thank you for reading this guide to understanding the Euro to Dollar exchange rate, factors that influence it, and the history over the past 10 years.  To continue learning and advancing your career, these additional resources will be helpful:

• US to CAD Exchange RateUSD/CAD Currency CrossThe USD/CAD currency pair represents the quoted rate for exchanging US to CAD, or, how many Canadian dollars one receives per US dollar.  For example, a USD/CAD rate of 1.25 means 1 US dollar is equivalent to 1.25 Canadian dollars. The USD/CAD exchange rate is affected by economic and political forces on both
• Forex Trading GuideForex Trading - How to Trade the Forex MarketForex trading allows users to capitalize on appreciation and depreciation of different currencies. Forex trading involves buying and selling currency pairs based on each currency's relative value to the other currency that makes up the pair.
• Top Forex Trading Tips5-Step Guide to Winning Forex TradingHere are the secrets to winning forex trading that will enable you to master the complexities of the forex market. The forex market is the largest market in the world in terms of the dollar value of average daily trading, dwarfing the stock and bond markets.
• Financial Analyst CertificationBecome a Certified Financial Modeling & Valuation Analyst (FMVA)®CFI's Financial Modeling and Valuation Analyst (FMVA)® certification will help you gain the confidence you need in your finance career. Enroll today!