Currency competition between the dollar and euro: Evidence from exchange rate behaviors

Cheol S. Eun, Soo-Hyun Kim and Kyuseok Lee

Finance Research Letters, 2015, vol. 12, issue C, 100-108

Abstract: Using a simple numeraire currency-independent metric to measure distances between currencies, it is found that for most of the 25 sampled floating currencies, excluding the US dollar and euro, there has been a noticeable decrease in the ratio of a currency’s distance from the euro to its distance from the dollar during the period from 1999 to 2013. Evidence that exchange risk has increased substantially is also found for dollar-based agents, while it has decreased for euro-based agents. Overall, the findings indicate that the influence of the euro, relative to the dollar, on other currencies has increased since its introduction.

Keywords: Currency competition; Dollar; Euro; Exchange rates; Exchange risk (search for similar items in EconPapers)
JEL-codes: F31 F36 G11 G15 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:12:y:2015:i:c:p:100-108

DOI: 10.1016/j.frl.2014.11.003

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