FCD Currency World Cup
Yesterday in the FCD Currency World Cup we assesed the strengths of the Ghanaian Cedi and the US Dollar as the two countries took each other on in the FIFA world cup. Perhaps unsurprisingly the US Dollar trumped the Cedi and it turned out the football followed suit. So, today we will be assessing the fortunes of the Euro and Algerian Dinar as Belgium and Algeria play their first match of the tournament.
Belgium – The Euro (EUR)
The Euro is the second most traded currency in the world and is used in 18 European countries with more countries likely to take it on in the coming years. The Euro has had a volatile ride since its inception in 1999 as it spiked up to over 1.60 against Sterling falling close to parity in December 2008. This massive volatility was down to the financial crash that was experienced by so many and resulted in many of the European banks coming under major pressure, countries facing some of the deepest recession ever witnessed and huge levels of unemployment. The single currency economy has slowly battled against this though and countries such as Greece who were, at one stage, close to leaving the Euro now in a more stable economic position. The Eurozone is still by no means out of the woods yet and currently the pressing issue is falling inflation levels which recently led the European Central Bank (ECB) to cut interest rates to a record low and even put deposit rates to negative levels meaning banks now have to pay to hold money with the ECB all in an effort to promote lending and spending. As a result of the recent problems Sterling has recently pushed up close to a two year high and at the moment looks set to continue its rise. However, the ECB will be hoping that the recent changes will provide the spark that their economy needs and helps boost their currency over the course of the rest of the year.
Algerian Dinar (DZD)
The Dinar is divided into 100 santeem’s and has been in circulation since 1964 when it replaced the Algerian new Franc. The Algerian economy has shown reasonable growth over the past few years and inflation is running at a fairly steady levels however the proble faced by Algeria is that roughly 23% of their population live below the poverty line and as a result of this rich poor divide, like many developing economies, there is real pressure on the Bank of Algeria to promote growth across the whole of the country. Currently there are 134.50 DZD per £1.
So, from an examination of the two currencies it is clear the Euro, despite is current problems is the stronger of the two currencies (the pair is currently trading around the 107 DZD to €1 mark) so this could suggest that Belgium are the stronger of the two countries and economies.
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