Originally Posted by
slawecki
as i said, when introduced in 1999, the euro was pegged at about $1.00 us. and allowed to float free. after a short run to about $1.10per, the € dropped as low as $0.85 in '02.
i owned a business that purchased all raw materials in europe. about 3 years ago, i closed the door, as profit was impossible with the expensive euro.
as an aside, somewhere in the 80's(i think) the british pound almost reached parity with the us dollar. pound was under $1.05us.
I understand what you are saying but 'pegged' is the wrong word as that suggests that it was in some way controlled by the U.S. Dollar in the way that the two African francs are pegged to the Euro. Their exchange rate to the Euro is always the same, although, like the Euro, they float against other currencies. I think it might be better to say that when the Euro was initially constructed, its value was close to the dollar, perhaps by intent (although I think it was working off the value of the earlier ECU). It was the individual pre-Euro currencies which were pegged to the Euro while it was still a virtual currency, before they started issuing notes and coins.