1 unchanged sentence
The following discussion and analysis was prepared to supplement information contained in the accompanying financial statements and is intended to explain certain items regarding the Trust's financial condition as of December 31, 2021, and its results of operations for the fiscal years ended December 31, 2021 and December 31, 2020.
−Removed: It should be read in conjunction with the “Selected Financial Data” and the accompanying audited financial statements and related notes thereto contained in this report.
+Added: It should be read in conjunction with the audited financial statements and related notes thereto contained in this report.
Cautionary Statement Regarding Forward-Looking Information
15 unchanged sentences
NAV per Share;
−Removed: Valuation of Euro
+Added: Valuation of the Euro
The following chart illustrates the movement in the price of the Shares based on (1) NAV per Share, (2) the “bid” and “ask” midpoint offered on NYSE Arca and (3) the Closing Spot Rate, expressed as a multiple of 100 euro:
−Removed: The Sponsor is not aware of any trends, demands, conditions or events that are reasonably likely to result in material changes to the Trust’s liquidity needs.
+Added: Liquidity and Capital Resources
+Added: The Sponsor is not aware of any known trends, demands, commitments, events or uncertainties that will result in, or are reasonably likely to result in, material changes to the Trust’s liquidity and capital resources needs.
The Trust’s Depository, JPMorgan Chase Bank, N.A., London Branch, maintains two deposit accounts for the Trust, a primary deposit account that may earn interest and a secondary deposit account that does not earn interest.
8 unchanged sentences
Results of Operations
−Removed: For the year ended December 31, 2020 and the year ended December 31, 2019
−Removed: During the year ended December 31, 2020, an additional 4,550,000 Shares were created in exchange for 428,947,584 euro and 4,400,000 Shares were redeemed in exchange for 414,936,856 euro.
−Removed: In addition, 2,238,467 euro were withdrawn to pay the Sponsor's fee and the interest expense on currency deposits, due to the negative interest rate.
−Removed: As of December 31, 2020, the number of euro owned by the Trust was 267,879,731, resulting in a redeemable capital Share value of $327,516,510.
−Removed: During the year ended December 31, 2019, an additional 2,750,000 Shares were created in exchange 261,604,378 euro and 2,950,000 Shares were redeemed in exchange for 281,022,381 euro.
−Removed: In addition, 1,798,500 euro were withdrawn to pay the Sponsor's fee and the interest expense on currency deposits, due to the negative interest rate.
−Removed: As of December 31, 2019, the number of euro owned by the Trust was 256,107,470, resulting in a redeemable capital Share value of $287,263,846.
−Removed: An increase in the Trust’s redeemable capital Share value from $287,263,846 at December 31, 2019 to $327,516,510 at December 31, 2020, was primarily the result of an increase in the number of Shares outstanding from 2,700,000 at December 31, 2019 to 2,850,000 at December 31, 2020 coupled with an increase in the Closing Spot Rate from 1.1225 at December 31, 2019 to 1.2235 at December 31, 2020.
−Removed: No interest income was earned during the years ended December 31, 2020 and December 31, 2019, due to an annual nominal interest rate which remained below 0.00% through those periods, as set forth in the FXE Daily Rate chart above.
−Removed: The Sponsor’s fee accrues daily at an annual nominal rate of 0.40% of the euro in the Trust.
−Removed: Due primarily to an increase in the weighted-average euro in the Trust, the Sponsor’s fee increased from $986,693 for the year ended December 31, 2019 to $1,136,286 for the year ended December 31, 2020.
−Removed: Due primarily to an increase in the weighted-average euro in the Trust, interest expense on currency deposits increased from $1,051,500 for the year ended December 31, 2019 to $1,435,575 for the year ended December 31, 2020.
−Removed: The only expenses of the Trust during the years ended December 31, 2020 and December 31, 2019 were the Sponsor’s fee and interest expense on currency deposits.
−Removed: The Trust’s net comprehensive income (loss) for the year ended December 31, 2020 was $(2,571,861), due to the Sponsor’s fee of $1,136,286 and interest expense on currency deposits of $1,435,575 exceeding interest income of $0.
−Removed: The Trust’s net comprehensive income (loss) for the year ended December 31, 2019 was $(2,038,193), due to the Sponsor’s fee of $986,693 and interest expense on currency deposits of $1,051,500 exceeding interest income of $0.
−Removed: Cash dividends were not paid by the Trust in the years ended December 31, 2020 and December 31, 2019 as the Trust’s interest income did not exceed the Trust’s expenses during those periods.
−Removed: Critical Accounting Policies
+Added: During the years ended December 31, 2021 and 2020, the Trust’s net comprehensive income (loss) was, in part, impacted by
+Added: market volatility and uncertainty caused by the novel coronavirus known as COVID-19, which is considered to be an unusual or
+Added: infrequent event.
+Added: Although the full and direct impact of COVID-19 on the Trust’s net comprehensive income (loss) during the years
+Added: ended December 31, 2021 and 2020 cannot be known, it is believed that COVID-19 has impacted the Closing Spot Rate, the interest
+Added: rate paid by the Depository, and the global economy and markets generally, including the number of Shares created and redeemed by the Trust.
+Added: In 2021, the euro had its largest annual decline against the U.S.
+Added: Dollar since 2015.
+Added: Reimposed activity restrictions in several European Union member states to control the spread of the COVID-19 Omicron variant and a deteriorating Eurozone trade balance, coupled with the European Central Bank’s (ECB) policy divergence with other major central banks in terms of normalizing monetary policy, weighed on the currency.
+Added: While the ECB has remained relatively dovish and is not expected to increase interest rates until early 2023, other central banks, such as the U.S.
+Added: Federal Reserve System (the Fed) and the Bank of England, have already raised rates or announced plans to raise rates by the end of 2022.
+Added: 2020 was a positive year for the euro (EUR/USD), marking its largest annual gain against the U.S.
+Added: Dollar since 2017 and ending the year at over two-year highs.
+Added: After declining to 3-year lows at the onset of the COVID-19 pandemic in early 2020 as investors rushed towards the safe haven U.S.
+Added: Dollar, a favorable risk environment driven by unprecedented global stimulus and vaccine optimism throughout 2020 led to a weakening of the U.S.
+Added: Dollar, driving up the EUR/USD rate by the end of 2020.
+Added: Simultaneously, growing optimism around a post-Brexit trade deal helped the euro advance through the end of 2020.
+Added: Additionally, the interest rate paid by the Depository has generally trended downward over the past several years to the current interest rate of -0.65%, as set forth in the FXE Rate Chart above.
+Added: As long as the Sponsor’s fee and the interest expense on currency deposits, if any, exceed interest income, the Trust will incur a net comprehensive loss.
+Added: Critical Accounting Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Sponsor’s management to make estimates and assumptions that affect the reported amounts of the assets and liabilities and disclosures of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period covered by this report.
2 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.