The value of the euro has slipped slightly from the value of the dollar today, reaching its lowest level in two decades. The Euro has fallen against the US currency for quite some time now. This development is linked to the fear of recession in Europe. Higher interest rates in the US are also helping the dollar to move ahead against the euro.
At the end of the afternoon, the euro was worth only $0.9938. As a result, the value of the Euro has fallen below the level it was at more than a month ago. At that time, the euro and the dollar were already equal to the exact same amount, a situation called parity. That was the first time since 2002. A few days later, the euro was also less than a dollar for a while, but then the single European currency became more expensive again.
The weakening of the euro makes it more expensive for people who pay in the single currency to buy dollars, for example going on vacation to the United States. For Americans, it has become cheaper to buy euros for a vacation in Europe.
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Importing US goods has also become more expensive for European companies, while European companies that do export can benefit from cheap euros. Crude oil imports into Europe will cost more, as oil and other commodities are settled in dollars. This could push inflation further.
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