Global Economy: Euro And US Dollar Nearly At 1:1 Ratio After 20 Years
The euro is worth about the same as the U.S. dollar for the first time in nearly two decades. As of 3 p.m. ET on Monday, 1.00 euro was equal to $1.0062584 dollars.
This is a result of the euro dropping around 20% over the past 14 months due to economic issues. The last time that this happened it dropped below 90 cents in around 2000, a year after it was adopted in 1999 when the European Union was established.
“We are in choppy waters. It’s going to be a tough ’22, but maybe even a tougher 2023,” The International Monetary Fund’s Managing Director Kristalina Georgieva told Reuters on Wednesday.
The euro has consistently traded above the dollar. Over the past two years, one euro has been worth about $1.18 on average, according to Federal Reserve data. During the 2008 recession in the U.S., the euro reached a value of $1.60 compared to the dollar.
Europe is dealing with an energy crisis due to less dependency on Russian oil, along with its interest rates reaching 8.6%, the highest they have been since 2011.
“This is a heavy cloud hanging over European assets at the moment, and they were among the worst global performers yesterday as the prospect of a chaotic gas situation and recession came closer into view,” Deutsche Bank strategist Jim Reid wrote in a research note on Wednesday.
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