After reaching parity with the dollar, the euro exchange rate continued to fall. On Wednesday, the European common currency briefly traded at $ 0.9998.
For the first time in twenty years, the euro is worth less than one US dollar. The common currency briefly fell below the one-dollar mark on Wednesday. A price of $0.9998 was marked at the low.
It is the first time since late 2002 that the euro has fallen below parity with the US currency. This means a one-to-one exchange ratio. On Tuesday, the euro had fallen exactly to par with the dollar.
Euro descent has accelerated
The weakness of the euro is not new, it has been going on for several months. Recently, however, the descent has accelerated. The main reason is the fear of an energy crisis in Europe. Dependence on Russian gas imports is high, and experts see the danger of a permanent supply stop due to the Ukraine war.
Another reason for the weakness of the common currency is the European Central Bank’s (ECB) comparatively cautious fight against high inflation.
The reason for the collapse of the common currency are the poor economic prospects for the euro zone due to the consequences of the Ukraine war. At the same time, the central bank in the USA is taking a tough stance against high inflation and has already raised key interest rates several times. That strengthens the dollar.
Source: Stern
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
