Effective exchange rates

Nominal EER

The ECB publishes the nominal effective exchange rate (EER) of the euro based on weighted geometric averages of bilateral euro exchange rates against the currencies of a selection of trading partners. This rate indicates whether it is getting more or less expensive on average to exchange foreign currency for euro.

Real EER

The real EER provides a measure of the euro area’s international price and cost competitiveness. The ECB calculates EERs based on the following deflators, which measure developments in prices and costs in the euro area and in its main trading partners: consumer price indices, producer price indices, GDP deflators, and unit labour cost indices – the latter reflecting either the total economy or only the manufacturing sector.

Selected features

Nominal and real EER indices are currently computed against

  • a narrow group of 12 partner countries (EER-12), including Australia, Canada, Denmark, Hong Kong, Japan, Korea, Norway, Singapore, Sweden, Switzerland, the United Kingdom and the United States
  • a group of 19 partner countries (EER-19), comprising the EER-12 plus China and the six non-euro area EU Member States not included in the EER-12
  • a broad group of 38 partner countries (EER-38), encompassing the EER-19 plus 19 additional relevant trading partners

The EERs are constructed using moving trade weights, computed on the basis of shares in euro area external trade in manufactured goods. The weighting scheme combines information on imports and exports and accounts for so-called third-market effects, i.e. competition faced by euro area exporters in a partner country from exporters of a third country.