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 exchange exchange whether it is getting more or less expensive on average to exchange foreign currency for euro. The ECB calculates EERs based on the following deflators, which measure developments in exchange exchange 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.
The EERs are constructed using moving trade weights, computed on the basis of shares in euro area external trade in manufactured goods and services.
However, manufacturing-focused real effective exchange rates deflated by producer prices PPI or unit labour cost in the manufacturing sector ULCM use weights solely based on trade in manufactured goods.
The weights incorporate information on both exports and imports. Import weights are the simple shares of each partner country in total imports.
The final overall weights of each partner country are obtained as the weighted average of the export and import weights.