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How much is the Euro worth compared to the dollar?

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How much is the Euro worth compared to the dollar?

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On Friday the 30th of May, 2008, one Euro was worth approximately $1.62 Australia. If you want to look at current and past exchange rates, go to www.rba.gov.au However, you can’t simply compare the face value of the currency – you have to compare it relative to the cost of goods in different countries. This is known as the ‘real exchange rate’. For example, if a can of coke is AUD$1.50 in Australia, but €1.50 in a European country, then realistically, the value of the Euro is less than the Australian dollar. Of course, you wouldn’t use just 1 item like the can of coke, but you would look at multiple items and compare the ‘purchasing power parity'(PPP) adjusted exchange rate. You have to remember that money itself is only a transaction medium. You have to compare the exchange rate between Euro’s and goods in Europe, with the Australian dollar and goods in Australia.

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These values are really volatile and will probably remain volatile until the market sorts itself out; In 2001, when the Euro was introduced for mainstream use, its value was 1€ : 1$; now it stays in the 1.50$ – 1.60$ per Euro region, up from about 1.40$ per Euro at the beginning of the year. The Euro is likely to depreciate slightly in the near future following the economic downturn in Spain and France, but it will probably not go below the 1.50$ : 1€ region.

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One euro is the same as $1.55, so the euro is stronger than the US dollar

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