The Rise of the Euro

The currency isn't simply growing in value, writes the McKinsey Global Institute's Diana Farrell. Its strength reflects euro zone financial-market vibrancy

With the euro surging to new highs against the dollar, many people wonder how much farther the young currency can climb and what its new strength says about the U.S. economy's current troubles. But this is a short-term view and a one-sided focus. In the longer term, we see the euro's growing popularity in large part as a reflection of the growth, development, and vibrancy of the euro zone's financial markets.

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