# CE2004070EN.01002501.xml

| 20.3.2004 | EN | Official Journal of the European Union | CE 70/25 |
| --- | --- | --- | --- |

20.3.2004

EN

Official Journal of the European Union

CE 70/25

---

(2004/C 70 E/027)

WRITTEN QUESTION E-3820/02

by Jonas Sjöstedt (GUE/NGL) to the Commission

(9 January 2003)

Subject:   Movement of the euro against other currencies

Subject:

How closely has the Commission studied the movement of the euro against other major currencies on the world market?

Which currency has fluctuated most, the euro or the Swedish krona, against each of the three currencies, the US dollar, the Japanese yen and the pound sterling, since 1 January 1999?

Answer given by Mr Solbes Mira on behalf of the Commission

(31 January 2003)

(31 January 2003)

The Commission is in charge of the multilateral surveillance and for this purpose the Commission monitors economic and financial developments in each Member State and in the Community as well. In this context the Commission monitors the euro's movements against other currencies and its impact on the euro area economy.

The foreign exchange rate is a relative price. Variations in the exchange rate between two countries can occur either by developments in the home country, or by developments in the foreign country. The experience with floating exchange rate regimes shows that exchange rate movements can be large. Standard measures of dispersion can be calculated as an indication of a currency's variation against other currencies, bearing in mind that currency variations depend on several factors that are not always anchored in changes in relative fundamental factors. If a change in a currency pair is the result of a change in relative fundamental factors, such a currency movement may be warranted. Conversely, if a change in a currency pair cannot be attributed to any change in relative fundamental factors, that movement could be considered unwarranted. Hence, exchange rate variation as such has little informative value on its own; the factors behind an exchange rate move must also be considered.

The table below displays some standard measures of dispersion, such as the standard deviation and variance, over the period 1 January 1999 to 19 December 2002. According to these measures, the relation between the Swedish krona and the US dollar (USD) have displayed a greater dispersion than the relation between the EUR and the USD. The same is true for the relation between the Swedish krona (SEK) and the Pound Sterling (GBP). The relation between the Swedish krona and the Japanese Yen (JPY) have displayed a somewhat smaller dispersion than the relation between the euro and the Japanese Yen.

| | EUR/USD | SEK/USD | EUR/JPY | SEK/JPY | EUR/GBP | SEK/GBP | EUR/SEK |
| --- | --- | --- | --- | --- | --- | --- | --- |
| STDEV (1) | 6,6 | 8,2 | 7,6 | 7,3 | 3,3 | 4,6 | 3,8 |
| AVEDEV (2) | 5,6 | 7,2 | 6,3 | 5,7 | 2,5 | 3,9 | 3,2 |
| DEVSQ (3) | 45 484,0 | 70 062,0 | 60 468,0 | 54 481,0 | 11 036,0 | 22 061,0 | 15 155,0 |
| VAR (4) | 44,0 | 67,8 | 58,5 | 52,7 | 10,7 | 21,3 | 14,7 |

EUR/USD

SEK/USD

EUR/JPY

SEK/JPY

EUR/GBP

SEK/GBP

EUR/SEK

STDEV (1)

1

6,6

8,2

7,6

7,3

3,3

4,6

3,8

AVEDEV (2)

2

5,6

7,2

6,3

5,7

2,5

3,9

3,2

DEVSQ (3)

3

45 484,0

70 062,0

60 468,0

54 481,0

11 036,0

22 061,0

15 155,0

VAR (4)

4

44,0

67,8

58,5

52,7

10,7

21,3

14,7

---

(1)  Standard deviation.

1

(2)  Average of the absolute deviations of data points from their mean.

2

(3)  Sum of squares of deviations of data points from their mean.

3

(4)  Variance.

4

---