Euro (EUR)

The Euro (EUR) was launched in 1999 as an electronic currency and entered physical circulation in 2002. It is the shared currency of 20 EU member states (the Eurozone), representing a combined economy of approximately EUR 13 trillion — the world's second largest after the US. The Euro is the 2nd most traded currency globally and the 2nd most held reserve currency.

EUR's value is managed by the European Central Bank (ECB), headquartered in Frankfurt. The ECB's primary mandate is maintaining Eurozone inflation at 2% (HICP). Unlike the US Federal Reserve, the ECB has a single mandate focused on price stability, without an explicit employment target. In 2022-2023, the ECB raised rates aggressively to combat post-COVID inflation.

The EUR/USD exchange rate is the most traded currency pair in the world, accounting for approximately 23% of global daily FX volume. EUR/USD movements are primarily driven by the interest rate differential between the ECB and the US Federal Reserve. When the Fed raises rates faster than the ECB, EUR/USD falls; when the ECB is more hawkish, EUR/USD rises.

For EUR remittances to South Asia, the key communities are the Pakistani diaspora in continental Europe (~600,000, mainly Italy, Spain, Germany) and the Indian diaspora (~350,000 in the Eurozone). Wise is the clear leader for EUR transfers — its EU SEPA account allows free euro transfers before conversion, significantly reducing costs.