Just Curious-where does the "Dollar" come from in "Euro-Dollar"?
Mar 14th, 2001, 08:41 AM
#21
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In defense of those who talk about "French dollars" etc., it may be because the foreign currency we're most familiar with is the Canadian dollar, and we also hear about Australian dollars. Several other countries call their unit of currency "dollar" too. There's the Zimbabwean dollar, and I think a couple other African countries use the term.
Mar 14th, 2001, 09:48 AM
#22
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Sorry, Sjoerd, I guess I'm not very good at explaining things, but Ed has explained it much better. Yes they told us that the Euro was based on the established ecu and that was originally set to approximately coincide with the US dollar. To say that it "just happened by coincidence" that the Euro came out to be similar in price to the dollar is totally false. It is relatively close to the dollar because it was originally set to be so, or rather the ecu that it is based on was set to resemble the value of a US dollar. Does that make it clearer?
Mar 14th, 2001, 10:28 AM
#23
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Mar 14th, 2001, 07:18 PM
#25
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I don't know if the original ECU was designed to be roughly worth one dollar. Anyway, its value against the dollar changed a lot over the 30 years or so of its existence, and it was indeed a coincidence if it's value when the euro replaced it was close to 1 $.
Anyway, you don't need a currency worth more or less the same to *compete* with another one. The euro could be worth 1 american cent and replace the dollar as the international currency or could be worth 100 $ and never be used in any foreign exchange.
By the way, though it wasn't the main goal (avoiding the problems caused by variation of the exchange rates between the various european currencies was), "competing" with the dollar was certainly one of the numerous secondary goals (the fact that the dollar is the international reserve and exchange currency give a huge economical advantage to the US for various reasons).
