Week 21, 2012: The Euro Exchange Rate

Summary: There has been increasingly serious talk about the possibility of Greece leaving the Euro this week, and the Euro exchange rate has continued to suffer as a result.

What does the chart show? The chart shows the price of 1 Euro in both British Pounds (the blue line, measured against the left hand axis) and US Dollars (the red line, measured against the right hand axis), measured at the end of each day of currency trading.

Why is the chart interesting? Since the beginning of April, there has been a clear downward trend in the price of the Euro compared to the Pound and the Dollar. Despite a brief resurgence last week, the price is back down now to the lowest it has been all year. Price drops in currencies are typically associated with investors and currency traders moving their assets from Euros to other currencies, such as the Pound or the Dollar. This is an indication, if any were needed, that the market does not expect that the current crisis in the Eurozone will be resolved easily.