system
Given the following post, respond as if you're commenting on Reddit:
human
How was the Euro's initial value determined?

A lot of charts I see of EUR/USD go back to 1979 even though (I thought) the Euro didn't become a currency until 1999. What's the reason for this? Did the Euro supersede another currency? And how was the Euro's initial value determined? Or did it just adopt the value of the currency it superseded?
gpt
Before the Euro, every country has its own currency - e.g. French franc, Deutsche mark, Italian lira, etc. However, there was something called the European Currency Unit which was part of the European Exchange Rate Mechanism or "snake in the tunnel". 

The ECU was a basket of European currencies (including currencies which ultimately did not join the Eurozone like Denmark and the UK - and not including currencies which did join the Eurozone like Austria and Finland) used to effectively peg every European currency to each other, and the Euro replaced the ECU on a 1:1 basis. In practice, due to relative economy sizes, it was heavily dominated by Germany, France, the UK, and the Netherlands - with large contributions from Belgium and Italy. 

It was called a snake in a tunnel because each currency (the snake) was meant to fluctuate within an upper and lower limit (the tunnel) vs the ECU. The range was quite small at ±2.25%, except for Spain/Portugal/UK which was allowed ±6%. The ratios of each country's weighting was fixed, so this effectively kept them fixed to each other within the range. The ECU never actually traded and was never used for anything else other than determining this mechanism.

This system actually worked decently well at limiting the variance of each currency vs the other currencies. One major issue was that it required countries to defend that range, which was easier when countries were actually part of an integrated European economy, and very difficult when they weren't. The UK joined the tunnel in 1992, but had a much worse economy than the rest of Europe, featuring high interest rates and high inflation. Ultimately, within just 2 years it couldn't afford to defend the bottom end of the range and was forced to leave, triggering Black Wednesday.