For the first time in 20 years, the euro has fallen to the level of the dollar. In London, the euro area’s common currency and the US currency reached parity on Tuesday – the first time since 2002, when the common currency became official tender.
The euro has been under pressure on the financial markets for some time. The reasons are the effects of the Ukraine war, which hit Europe particularly hard, and the European Central Bank’s comparatively cautious fight against inflation.
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The weakness of the euro is inconvenient in the current environment with comparatively high inflation rates. Because the lower the exchange rate of the common currency, the stronger other currencies such as the dollar become in relation to it. As a result, goods imported into Germany become more expensive. This fuels inflation.
When the euro exchange rate falls, consumers have to dig even deeper into their pockets to cover their living expenses. Above all, energy and raw material prices threaten to rise further.
Euro record high of 1.6038 in July 2088
The euro was first introduced as book money in 1999 – the exchange rate against the dollar on January 4, 1999 was 1.18 dollars. In January 2000, the euro fell below par with the dollar, and the record low was reached in October 2002 at $0.8230.
The issuance of the common currency to consumers began on January 1, 2002. At the same time, the economic prospects improved at the same time – the exchange rate rose again to over one euro.
Since then, the euro has been worth more than the dollar. It reached a record high of 1.6038 in July 2008 in the midst of the financial and economic crisis. (AFP, dpa)
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