Name: Euro, €, Common Currency, Shared Currency
Denominations: €5, €10, €20, €50, €100, €200, €500, notes. 1c, 2c, 5c, 10c, 20c, 50c, €1, €2 coins.
What factors affect it?
The Euro is used by 18 members of the European Union and is the official currency of the Eurozone. As it is a floating currency and used by so many different countries there are a lot of factors that can affect it. The economic wealth of each of the Eurozone members contributes toward the strength of the Eurozone as a whole, but as France, Germany and Italy are the biggest economies they are the main contributors to growth in the currency bloc and impact the standing of the Euro in relation to other currencies. Germany is the largest economy within the European Union and the nation’s unemployment rates and inflation figures are monitored to gauge the economic health of the entire Eurozone.
The deficits of Eurozone members can also affect the Euro. If one nation posts a deficit, this can have a domino effect on all the other countries, affecting economic growth, fiscal stability and the Euro.
A country’s GDP (Gross Domestic Product) calculates the monetary value of a country’s goods and services within a contained time period and is an indication of how well an economy is performing. Calculating the Eurozone’s GDP becomes more difficult as not all of its members participate in collecting the relevant data, however as Germany is responsible for a massive 30% of Eurozone GDP, German statistics are relied upon to judge productivity and monetary value.
As with every other country, inflation is a key point to consider the worth of the Euro which uses the Consumer Price Index. However it’s slightly less relevant within the Eurozone as prior to the CPI results being released a specific German CPI estimate is made available, and as mentioned earlier, the German figures are the ones utilised most frequently to judge the economic health of the Eurozone and by extension, the Euro.