ABSTRACT
In the relatively short period from March 2002 to early 2005, the euro moved from an exchange rate of 0.88 against the US dollar to around 1.35. This dramatic development took place against the backdrop of a euro which had previously been weakening vis-à-vis the dollar since its birth in 1999. However, since it peaked in 2005, the euro has maintained its strong position at a level of around 20 per cent above the dollar (see Figure 5.1).
