How well did the euro do this year against the other major currencies?
Here are the figures.
Overall, it was a good year to be the owner of the euro, with the currency up against most every other major currency, including the U.S. dollar, the U.K. pound, and the Japanese yen.
In terms of magnitude, of the major currencies shown, the euro performed the best against the Venezuelan Bolivar, the Taiwan dollar, the South Africa rand, the Australia dollar, and Brazilian real.
On the end, the euro was up the least against the Swiss franc, the U.K. dollar, the U.S. dollar, the New Zealand dollar, and the Singapore dollar.
If you are a professional market watcher, or even a casual observer, the surprising strength in the euro is not something that probably surprised you. In general, at this time last year most foreign currency market observers were concerned about the political stability of Europe and the ability of businesses located in European nations to compete on a global scale. Well, if you were one of those, you were wrong.
What happened in 2013 that pushed the euro to the top of the currency food chain?
Among the many reasons, here are two.
First, businesses in Europe and the European economies overall performed much better than expected, with the feared austerity budget savings likely better for Europe than what most news establishments will let on.
Second, foreign currency investors are losing faith in the U.S. dollar, which increased demand for the world’s second most traded currency – the euro. Investors’ confidence in the U.S. appears to be waning for such reasons as the inability of elected officials to manage its balance sheet (they need to reduce expenditures) and disgust with such things as the National Security Administration’s spying programs (the land of the free does not look so free when viewed from the Orwellian perspective).
Overall, the euro did quite well in 2013, up against every major floating currency, including the U.S. dollar, the Japanese yen, and the British pound. The strength in the euro was due to surprising strength in European-based businesses and concern over American policy decisions.
