With the euro rising relative to the dollar, the yen s fall relative to the euro has been even greater.

Eurozone financial markets have stabilized, and the euro has appreciated against the dollar and the yen.

During the same period, the dollar fell by 15 relative to the euro and 12 against the yen.

The yen s value against the US dollar has declined by more than 7 in the last month. With the euro rising relative to the dollar, the yen s fall relative to the euro has been even greater.

The greenback has fallen against the euro by nearly 15 since the beginning of the summer.

The dollar s 10 decline relative to the euro over the past 12 months implies that the renminbi is actually down by about 4 relative to the euro.

When the euro was launched, the US dollar euro ( ) exchange rate stood at 1.16 1.

For the eurozone, it implies a strong exchange rate vis à vis the dollar (and, by implication, the yen, as the Bank of Japan closely monitors the yen dollar exchange rate).

The franc fell 8.8 against the euro, 9.5 against the dollar, and at least 8.2 against all 16 of the most active currencies on the day of the announcement.

The continuing weakness of the dollar against the euro has had a sizeable impact on the revised expenditure estimate for the current biennium.

In just over two months, the yen has weakened by more than 10 against the dollar and close to 20 against the euro.

In response to the announcement the franc fell against the euro, to 1.22 francs from 1.12 francs and lost 9 against the U.S. dollar within fifteen minutes.

The dollar has declined during the past two years against not only the euro but also against most other currencies, including the Japanese yen and the renminbi.

Until the recent crisis in Greece, the US benefited from a weak dollar euro exchange rate.

And the recent rise in the value of the dollar relative to the euro and the British pound helps by reducing import costs.

Japanese intervention cannot explain the revaluation of the euro against the dollar and many other currencies.

Between 2000 and 2005, the dollar lost more than 25 of its value against the euro.

While the renminbi has risen relative to the dollar, the dollar has declined against other major currencies.

WASHINGTON, DC Over the last several weeks, the dollar s depreciation against the euro and yen has grabbed global attention.

Will the Euro Dethrone the Dollar?

As a consequence, the euro is rising not only against the US dollar, but also against Asian currencies, whose central banks intervene in foreign exchange markets to fix their currencies value against the dollar.

The dollar has declined during the past two years against not only the euro but also against most other currencies, including the Japanese yen and the renminbi. On a real trade weighted basis, the dollar is down about 13 relative to its value in March 2006.

These and other countries with very large foreign exchange balances are beginning to diversify their holdings from dollars to euros, a process that will continue and that will inevitably cause the euro to rise relative to the dollar.

Spain and Greece have managed to achieve an internal devaluation of about 5 this year vis à vis Germany, but their competitiveness vis à vis the US and dollar linked countries has not improved, because the euro has appreciated by more than 5 against the dollar.

And, while the Chinese yuan has remained more or less unchanged relative to the US dollar in the past year, the dollar s sharp appreciation relative to the euro and other currencies caused the overall trade weighted value of the yuan to rise. This further depressed Chinese exports.

And the euro s appreciation against the dollar from 2002 until very recently meant that the shift in the CFA franc s exchange rate peg from the French franc to the euro caused a repeat of that scenario.

Apart from the declining reimbursement rates, the euro dollar exchange rate was unfavourable for the operational budget during 2003 and 2004, resulting in a lower support cost income in the euro currency, despite an increasing volume of technical cooperation delivery.

Now that the dollar has dropped 43 from its high against the euro, the process of global financial rebalancing is seriously underway.

The final budget reflects increased headquarters costs resulting from the introduction of revised salary scales after the 2004 2005 budget had been formulated and the continued weakness of the dollar against the euro.

Exchange rate euro to United States dollar

Reduced European dependence on the US export market can hardly protect Europe from the effects of the US economic slowdown if the euro appreciates as much against the key Asian currencies as it has against the dollar.

Asian central banks are still nervously clinging to the dollar. But with the US printing debt and money like it is going out of style, it would appear the euro is set to appreciate against the dollar two or three years down the road, if the euro is still around, that is.

To bring the cost of those goods and services down to the level in the US would require the euro to fall relative to the dollar by about 15 , to around 1.10.

So far, however, the RMB s appreciation against the dollar has been slow.

Fortunately for the dollar, the euro, too, seems to have its problems.

The euro s rapid appreciation against the dollar threatens to undermine this foundation.

Back then, pegging the renminbi to the dollar pushed down China s real effective exchange rate, because the dollar was losing value against other currencies, such as the euro, sterling, and yen.

Since early 2002, the dollar has fallen by one third against major currencies, and recently this decline has intensified.

Even after the dollar s recent rally relative to the euro, the trade weighted value of the dollar is now 15 lower against a broad basket of major currencies than it was a decade ago, and 30 lower than it was 25 years ago.

On January 1, 2008, the franc was valued at 1,129.40 per US dollar.

The Swiss franc has increased more than 40 against the dollar and therefore more than 30 against the renminbi.

Is the dollar about to lose the crown of world finance to the euro?

In early October 2004, during and immediately after the election of the Transitional Federal Government, the exchange rate of the illegal currency appreciated from 25,000 to 18,000 shillings to the United States dollar.

In the US, the inflation rate has also been depressed by the rise in the value of the dollar relative to the euro and other currencies, which has caused import prices to decline. This, too, is a level effect, implying that the inflation rate will rise once the dollar's exchange rate stops appreciating.

If the euro were fully ready for prime time, we might well be seeing it s dollar exchange rate jump to over 2.00, and not just to 1.65 or 1.70, as it seems poised to do anyway.