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Euro gained 2.9% to dollar during the last year from 1.11 in May of 2015. But in the long-term euro to dollar pair is in negative correction: since all-time high of 1.6 in July of 2008, euro down-trended by 28% in comparison to dollar. So the positive growth seems to be temporary.
Euro currency is expected to continue weakening against dollar following recent positive news from US labor market. Unemployment rate in the United States decreased by 0.5 percentage points from the previous year to 5% as of March approaching its "normal" level of 4.8%, that corresponds to "full-employment". Further movement in this direction accompanied by expansion of payroll figures will probably force the increase of the benchmark interest rate by the Federal Open Market Committee (FOMC) in order to restrain inflation. Current federal funds effective rate is 0.37% as of April this year. Increase of US interest rates may boost appeal of investment in the US and, as a result, demand for greenbacks. This, in turn, will spur pullback in EUR/USD.
From the other side, weakening of euro is enforced by expectations concerning Eurozone disintegration. Ratings Agency Moody's warned that even a "small crisis" could threaten the sustainability of the EU triggering the disintegration of the single currency area. This warning may cause significant fall of the euro exchange rate.
Presented statistics refer to foreign exchange reference rates reported daily to the IMF by the issuing central banks. In case of euro-dollar exchange rate, data comes from European Central Bank (ECB) and covers the period from the introduction of euro currency on the first of January of 1999 until now. This rates represent the average of buying and selling rates but do not capture real currency strength. Effective exchange rate is the one way to compensate this omission. It is calculated on the basis of weighted averages of bilateral exchange rates against main trading partners of the country, where weights are based on foreign trade trade volumes. Recent positive change in the index across the EU denotes strengthening of the euro.