Euro-Dollar parity: The 2022 market and impact on companies

• Autor(a) principal: Mota, Marta Susana Boino
• Data de Publicação: 2023
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10071/30060
• topic: Euro; US Dollar; Financial impact; Foreign exchange; Risco cambial -- Cambial risk; Dólar Americano; Impacto financeiro; Câmbio

The foreign exchange market is the biggest financial market in the world, in terms of trading volume, liquidity, and value, where trillions are traded every day, affecting millions of economic agents, whether those are individuals, corporations, or whole nations. Out of them, the trade of the US Dollar against the Euro takes up the biggest share. Considering the number of firms operating with more than one currency, these markets need to be closely followed. With the depreciation of the Euro against the US Dollar being accentuated in the middle of 2022, leading these currencies to reach parity for the first time in nearly 20 years, questions regarding the real impact of this movement and the trend that this exchange rate had been following became relevant. This report was written to find and quantify what this impact was for companies in the Euro-Zone and if it is significant for them. For that purpose, we use the historical exchange rates combined with panel data for the information collected from firms to create a regression and proceed to apply quantitative methods to these values, to find what variables are important to study, the impact of the depreciation of the euro against the dollar and if it is statistically significant.