The euro was introduced in 1999 as an electronic currency and became physical notes and coins in 2002. It is the official currency of 20 European Union countries, collectively known as the Eurozone. The US dollar has been the world's primary reserve currency since the Bretton Woods Agreement in 1944.
Over the years, the EUR/USD rate has seen some dramatic swings. It traded below parity shortly after the euro launched, then climbed all the way to 1.60 during the 2008 financial crisis. More recently, it dipped below parity again in 2022 when the Fed raised rates aggressively while the ECB was slower to respond.
Understanding the forces behind this exchange rate helps you make better decisions about when and how much to convert. Interest rate differentials, inflation readings, employment data, and geopolitical events all play a part in determining where the rate trades on any given day.