Euro and US Dollar Common currency Issue

Efforts By :Hitesh Jain (FM/11/013) Dulichand pawecha (FM/11/018) Bhavya Mishra (FM/11/016)
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Us dollar history
English Thaler; The Scandinavia Daler; The United States Dollar.
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Main periods of the United States Dollar

1. Coinage period bimetallism From 1792 to 1873 dollar was freely backed by both gold and silver at a ratio of 15:1 Therefore, in 1834, the 15:1 ratio was changed to a 16:1 ratio. PGD-FM SEM -2 (HITESH, DULICHAND,
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Did You Know

That the $500, $1000, $5000 and $10,000 bills have not been printed since 1946? That it costs only 4.1 cents to make a $1 bill. It costs the same thing to make a $100 bill? That if we laid each current U.S. bill printed side by side they would stretch around the earth's equator about 24 times? That to have your picture on a bill, you must be known for something you have done for USA 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 the Maastricht Treaty. The history of Euro begun with participating countries fixing their domestic currencies to the Euro.
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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 was launched 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 which involved creation of the European Currency Unit. Per history of Euro, originally twelve (12) of the 15 EU countries (Germany, France, Austria, Spain, Portugal, Italy, Belgium, Luxembourg, the Netherlands, Finland, Greece and Ireland) were members of the so-called Eurozone. Euro history tells us that these states 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 of creating a more stable European economy. Looking at the history of euro, we can see that the Euro improved economic growth across Europe and offered more integration among financial markets. The euro history also shows that the Euro currency strengthened European presence in the global economy through being a reserve currency. The history of euro also proves that the Euro helped ease exchange rate volatility among different European nations
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Euro history problems

The history of euro has brought also a number of problems. While the euro improved stability of the region, all nations have to have relatively similar interest rate to avoid interest rate arbitrage. This has created problems for some economies in the euro history, such as Germany. The Euro has taken away the interest rate as a tool of the fiscal policy. If the local economy slows, the local government cannot lower interest rates to stimulate growth.
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Countries use the US Dollar

1. 2. 3. 4. 5. 6. East Timor British Indian Ocean Territory British Virgin Islands East Timor Ecuador El Salvador

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Cont.
7. Marshall Islands 8. Northern Mariana Islands 9. Palau 10.Panama 11.Turks and Caicos Islands 12.United States

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Euro Countries
23 Countries Use the Euro as their Official Currency 1) Andorra 2) Austria 3) Belgium 4) Cyprus 5) Estonia 6) Finland 7) France 8) Germany 9) Greece 10) Ireland
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Cont.
11) Italy 12) Kosovo 13) Luxembourg 14) Malta 15) Monaco 16) Montenegro 17) Netherlands 18) Portugal 19) San Marino 20) Slovakia 21) Slovenia 22) Spain 23) Vatican City
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Common currency issue

1957 The Treaty of Rome was signed, creating the European Atomic Energy Community (EURATOM) and the European Economic Community (EEC). The objective of the Member States was to remove trade and tariff barriers between them and to form a common 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, West Germany) 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 of experts, 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 EU currency and the founding of the European Central Bank

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Dollar vs. Euro

Not long after the introduction of the euro as a cash currency in 2002, the dollar began to depreciate steadily in value. As U.S. trade and budget deficits continued to increase, the euro started rising in value. By December 2004, the dollar had fallen to new lows against all major currencies; the euro rose above $1.36/ (under 0.74/$) for the first time, in contrast to previous lows in early 2003 (0.87/$).
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Cont.
In the first quarter of 2004 the U.S. dollar, with the advantage of Federal Reserve's policy of raising the interest rates, regained some standing against all major currencies, climbing from 0.78/$ 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 $1.60/ (0.63/$), it finished 2005 with an increase against the euro, climbing to 0.83/$.

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