euro and us dollar common currency issue

7/31/2019 Euro and US Dollar Common Currency Issue

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Euro and US Dollar Common

currency Issue

Efforts By :-Hitesh Jain (FM/11/013)

Dulichand pawecha (FM/11/018)

Bhavya Mishra (FM/11/016)1PGD-FM SEM -2 (HITESH, DULICHAND,

BHAVYA,)


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Us dollar history

English Thaler;

The ScandinaviaDaler;

The United StatesDollar.

2PGD-FM SEM -2 (HITESH, DULICHAND,BHAVYA,)


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Main periods of the United States

Dollar

1. Coinage period

bimetallism

From 1792 to 1873

dollar was freelybacked by both gold

and silver at a ratio of

15:1

Therefore, in 1834, the15:1 ratio was

changed to a 16:1

ratio.3PGD-FM SEM -2 (HITESH, DULICHAND,

BHAVYA,)


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Did You Know

That the $500, $1000, $5000 and $10,000 billshave not been printed since 1946?

That it costs only 4.1 cents to make a $1 bill. Itcosts the same thing to make a $100 bill?

That if we laid each current U.S. bill printedside by side they would stretch around theearth's equator about 24 times?

That to have your picture on a bill, you mustbe known for something you have done forUSA and you must be deceased? =D



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Euro history

History of Euro - the Euro currency was

launched or introduced as an accounting

currency on January 1, 1999. The history of

Euro started with the acceptance of theMaastricht Treaty.

The history of Euro begun with participating

countries fixing their domestic currencies tothe Euro.

PGD-FM SEM -2 (HITESH, DULICHAND,BHAVYA,)

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Cont.

This event in the history of Euro meant that

local currencies were not allowed to fluctuate

against the Euro and against each other. When

the history of Euro was started, Euro waslaunched merely as an electronic currency.

Euro as a cash currency did not become a legal

tender until later, on January 1, 2002.


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Cont.

The roots of the euro currency originated in

the European Monetary System in 1979 whichinvolved creation of the European CurrencyUnit. Per history of Euro, originally twelve (12)

of the 15 EU countries (Germany, France,Austria, Spain, Portugal, Italy, Belgium,Luxembourg, the Netherlands, Finland, Greeceand Ireland) were members of the so-called

Eurozone. Euro history tells us that thesestates were joined later by Slovenia (2007),Cyprus (2008), Malta (2008), and Slovakia(2009).


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Benefits in the history of Euro

The Euro was implemented with the goal ofcreating a more stable European economy.Looking at the history of euro, we can see thatthe Euro improved economic growth across

Europe and offered more integration amongfinancial markets. The euro history also showsthat the Euro currency strengthened Europeanpresence in the global economy through being a

reserve currency. The history of euro also provesthat the Euro helped ease exchange rate volatilityamong different European nations


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Euro history problems

The history of euro has brought also a numberof problems. While the euro improvedstability of the region, all nations have to haverelatively similar interest rate to avoid interestrate arbitrage. This has created problems forsome economies in the euro history, such asGermany. The Euro has taken away the

interest rate as a tool of the fiscal policy. If thelocal economy slows, the local governmentcannot lower interest rates to stimulategrowth.


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Countries use the US Dollar

1. East Timor

2. British Indian Ocean Territory

3. British Virgin Islands4. East Timor

5. Ecuador

6. El Salvador


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Cont.

7. Marshall Islands

8. Northern Mariana Islands

9. Palau10.Panama

11.Turks and Caicos Islands

12.United States


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Euro Countries

23 Countries Use the Euro as their OfficialCurrency

1) Andorra2) Austria

3) Belgium4) Cyprus5) Estonia6) Finland7) France

8) Germany9) Greece10) Ireland


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Cont.11) Italy

12) Kosovo13) Luxembourg14) Malta15) Monaco

16) Montenegro17) Netherlands18) Portugal19) San Marino20) Slovakia

21) Slovenia22) Spain23) Vatican City


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Common currency issue

1957 The Treaty of Rome was signed,creating the European Atomic EnergyCommunity (EURATOM) and the European

Economic Community (EEC). The objective ofthe Member States was to remove trade andtariff barriers between them and to form acommon market.



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Cont.

1979 The governments and central banks of

the nine Member States (Belgium, Denmark,

France, Ireland, Italy, Luxembourg, the

Netherlands, the United Kingdom, WestGermany) created the European Monetary

System (EMS) which had the main goal to

create a common currency.


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Cont.

1988 The European Council, that is the

Heads of State and Governments, confirmed

the objective of realising Economic and

Monetary Union (EMU). A committee ofexperts, chaired by the then President of the

European Commission, Jacques Delors,

examined ways of achieving EMU. Its report(the Delors Report) proposed a transition in

three stages.


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Cont.

1992 Representatives of twelve European

Union (EU) Member States signed the Treaty

on European Union (Maastricht Treaty) that

provided for the establishment of a single EUcurrency and the founding of the European

Central Bank


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Dollar vs. Euro

Not long after the introduction of the euro asa cash currency in 2002, the dollar began todepreciate steadily in value. As U.S. trade and

budget deficits continued to increase, theeuro started rising in value.

By December 2004, the dollar had fallen tonew lows against all major currencies; theeuro rose above $1.36/ (under 0.74/$) forthe first time, in contrast to previous lows inearly 2003 (0.87/$).


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Cont.

In the first quarter of 2004 the U.S. dollar, with

the advantage of Federal Reserve's policy of

raising the interest rates, regained some

standing against all major currencies, climbingfrom 0.78/$ to 0.84/$. However, all gains

were lost in the second half of 2004, and the

dollar stood at 0.74/$ at the end of 2004.


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Cont.

Since 2002, the only year in which the dollar

actually recovered against the euro was 2005.

Although some analysts previewed the dollar

dropping as far as $1.60/ (0.63/$), itfinished 2005 with an increase against the

euro, climbing to 0.83/$.


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euro and us dollar common currency issue

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