What Are the Similarities Between the Dollar & the Euro?
The euro and dollar are considered the most significant and most liquid currency pair in the world, as they account for almost 28 percent of the global daily volume since 2004. The two currencies are always being closely compared to each other. Most published articles discuss the differences between the dollar and euro but not much about their similarities.
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Currency Division
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Although there is a slight difference in the denominations of the two currencies, one common and obvious similarity of the euro and dollar is the currency division. Both currencies are divided into 100 cents.
Reserve Currency
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A reserve currency is held by government and institutions in significant quantities as part of a country's foreign exchange reserves. It is also used as an international pricing currency in product trading on a global market. The reserve currency allows the country to purchase commodities at a lower price than other nations. Countries with lower reserve currency exchange their money with every purchase and still pay an applicable transaction cost. The reserve system has been changing globally in the last few years but dollars and euro continued to hold reserve currency allowing both countries to run higher trade deficits. In the last 10 years, UD Dollar reserve currency accounts for two thirds and the euro one fourth of the total foreign exchange reserves.
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Strength and Stability
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Over the years, the euro and dollar have had an excellent value in the international financial market. Both currencies have been extremely successful and persistent in the global face of monetary competition. Although the dollar continues to dominate the foreign exchange market, the euro is rapidly growing its economic and financial size to the surprise of academic economists. The two currencies have high purchasing powers and are regarded as top traded currencies in the world. Euro and dollar also have high monetary value of combined coins and banknotes in circulation all over the world because both are widely used even in other countries.
Security Features
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Paper money, just like in other countries, can be counterfeited. Dollar and euro banknotes were designed with distinct security features but there are still a few similarities that can be pointed out. You can check a paper money imitation by feeling the bill's texture. Both the dollar and euro have unique prints and raised ink used in the printing. In addition, both currencies also use a security thread and watermark that are visible when held against light.
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References
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