ue to the strength of sterling, then decided to adopt a "wait-and-see" approach to the Euro. It was decided that the launch would go ahead without the UK. Despite this, the Euro was billed as a strong currency, ready to take the dollar head on. Two weeks before the launch, Euro zone interest rates were set at 3% and the European Central Bank stated that there was to be no reduction in the immediate future. The reasoning behind this was to help give the Euro a strong position in the first six months, leaving the US as the only economic power with the option to boost world trade by lowering interest rates. If this were the case, it would put pressure on the already vulnerable dollar.
             The performance of the Euro could be compared to a lead balloon. Having launched at $1.17, the Euro sank to just above parity with the dollar by July. But it didn't stop there. The value against the dollar, as well as other currencies including the Japanese Yen, continued to plummet until it reached an all-time low of around $0.83 (October 15th, 2000), and after four somewhat unsuccessful interventions, it stayed in the late $0.80's. Throughout the rest of this essay, I will explain the reasons of why the Euro has performed so poorly.
             A widely accepted reason for the Euros poor performance relative to the dollar is simply because the dollar is so strong. In turn, as the US conducts so much trade with Europe, Euro exchange rates automatically adjusted to compensate for the strength of the Dollar, and this, in turn, leads to the Euro falling in
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