The Euro Has Dropped More In The Last Three Weeks Than It Did All Last Year

The euro is tumbling.

A lot of people paid attention to the euro sinking against the dollar in 2014: It dropped by about 14%, and it’s now hovering near 11-year lows.

But on a trade-weighted basis (compared to the basket of currencies that its trading partners use) the fall was much more modest: It dropped just 5.02% in the whole of 2014.

The decline in just the last three weeks has been steeper: The euro dropped 6.03% on a trade weighted basis since the beginning of 2015.

That’s down to the pretty much unprecedented surge in the value of the Swiss Franc and the unexpectedly large quantitative easing scheme announced by the European Central Bank yesterday.

A lot of European politicians have been complaining about the strength of the euro: Italian Prime Minister Matteo Renzi said he wants it to reach parity with the dollar. But thanks to central banks in Bern and Frankfurt, the euro is weakening at a rapid pace.

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