Effective exchange rates of the euro

The indices of the nominal effective exchange rates of the euro are designed to measure the impact of changes in exchange rates on price competitiveness in the euro-area industrial sector.

These indices are calculated on the basis of the weighted averages of the relative changes in the bilateral euro exchange rates against the currencies of the euro-area trading partners. A positive change signifies an appreciation of the euro and thus a negative impact on the price competitiveness of the domestic industrial sector.

The weights are based on the trade in manufactured goods and services and also reflect third-market effects. The real effective exchange rates of the euro also take account of the differences in price movements between the countries under review.

For details relating to the method of calculation, please see the ECB’s scheme for real exchange rates (ECB's website, Statistical Data Warehouse, Explanatory note to Tables 8.1; details in Occasional Paper Nr 134 ECB from June 2012).