The Value of the Euro in August — How Does this Compare to January?

The Value of the Euro in August — How Does this Compare to January?

In the past year, the Eurozone was hit hard by the effects of the coronavirus pandemic. Of these countries, France was the worst affected, in terms of recorded cases of the virus, reporting nearly 6.5 million cases. Spain, Italy and Germany were also strongly affected, and in a desperate attempt to prevent the spread of COVID-19, were forced to implement national lockdowns, whereby large sectors within the economy shut down completely.

This caused unemployment levels to rise exponentially, and since the health of a country’s economy and its unemployment rate have a direct impact on the value of a currency, the Euro’s (EUR) value fluctuated significantly. When forex trading on platforms like Plus500 for example, you can speculate on price movements in the forex market, and trade using a host of tools and features that can reduce risk.

The pandemic itself, along with the specific placing and easing of restrictions, have had a dramatic effect on global economies. Because of this, the value of the EUR has changed significantly in the last 12 months. In this article, we will look at the value of the Euro in August 2021 and compare this to its value in January of the same year, to see what effect the year’s developments have had on the currency.

The Euro in January

To combat the spread of the virus, the European Union (EU) has worked with a traffic light system to judge the risk levels of specific countries. In January, the majority of countries were deemed high risk and therefore placed on the ‘red list’. This meant that travel to these countries was extremely limited and unless your journey was essential, you would not be allowed to enter.

Within their borders, countries were also operating under strict lockdown restrictions. This meant that citizens were largely encouraged to stay at home and large economic sectors, such as hospitality, were unable to function. This meant that economies were weakened and unemployment remained high in many EU countries.

However, with the approval of the coronavirus vaccines in January, and plans being put in place to roll them out across Europe, there was hope on the horizon with regards to economic recovery. This hope caused traders to become optimistic about the future of the forex market and the value of the Euro. JanJj

The Euro in August

As previously mentioned, the value of a currency is directly impacted by the relevant country’s unemployment rates. Recently, many European countries have seen a fall in unemployment because they were able to ease lockdown restrictions and open up vital sectors in their economies. This is due to the successful rollout of the COVID-19 vaccine worldwide, with an estimated 32.7% of the world’s population now having had at least one dose of the vaccine and 24.6% being fully vaccinated.

From April to June 2021, the Eurostat statistics office stated that employment had increased by 0.5% in Europe, compared to the previous quarter. This correlates with the increased strength of the European economy and the improved 2% Gross Domestic Product (GDP) performance in the second quarter of this year. As a result of both of these factors, the Euro has seen an increase in value. Therefore, in August, with regards to the economic health of European countries and coping with the pandemic, the continent is faring far better than the likes of the US. 

The economic situation is continually improving in the majority of EU nations, because of the mass easing of restrictions, enabling economies to begin to regain momentum. As the travel industry now also begins to take flight once more, there is a great sense of optimism looking towards the future, which should, in turn, drive the prices of the Euro. This is still however, dependant on the continuing economic recovery and the hope that no new strains of the virus emerge.   

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