The euro is the official currency of the euro area. It is, after the us dollar, the currency most traded on the foreign exchange market. According to a study from 2013, it would be present in 33, 4% of the trade. This sales result was driven by the success of the pair EUR-USD, the pair is the most traded market.
The euro is highly correlated to the level of inversion at risk
The european currency market with the cycles of the world economy. If this last is in full swing or recovery phase, the level of risk aversion is considerably reduced which is of benefit to the euro. Conversely, if the global economy is going through a crisis or a significant slowdown in the level of risk aversion increases, and the euro has depreciated on forex. The euro is not a safe haven, it is an asset at risk.
The euro depends on the internal crises of the area
If the euro is managed to maintain during the sub-prime crisis of 2007/2008 it is because the us dollar has collapsed. When it is low, however, this can often be explained by internal crises. The Greek crisis of 2010 has threatened the stability of the euro area and the currency collapsed on the markets, the sovereign debt crisis of 2011 has also helped to lower the euro, as the new Greek crisis more recently.
In general, what are the internal crises of the euro zone that impact the most the course of the european currency. With his status as a young currency, its sustainability is quickly put in doubt by investors in times of crisis.
When the situation is calm, it is then the level of risk aversion prevailing in the financial markets that changed the course of the euro. The economic growth of the euro area plays only a minor role in its fluctuations.
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