By Jasmine Browley ·Updated July 13, 2022
Have you traveled from the US to Europe, and wondered why everything was so much more expensive? It’s literally because their money is more valuable there. Now, for the first time in 20 years that’s not the case anymore.
CNN recently reported that the Euro was down nearly 12% since January. As a global recession looms, prompted by inflation costs and bumpy energy supply due to the Russia-Ukraine crisis. As CNN explained, the European Union, which received about 40% of its gas through Russian pipelines before the war, is trying to find alternative solutions to gain oil.
“Given the nature of Germany’s exports which are commodity-price sensitive, it remains hard to imagine that the trade balance could improve significantly from here in the next few months given the expected slowdown in the eurozone economy,” Saxo Bank foreign exchange strategists shared in a statement shared with CNN.
A scenario where the euro is trading below the US dollar between $0.95 to $0.97 could “well be reached if both Europe and the US find themselves slip-sliding in to a (deeper) recession in Q3 while the Fed is still hiking rates,” wrote Deutsche Global Head of FX Research George Saravelos as reported by CNN.
Although this bodes unfortunate for Europeans, conversely Americans traveling to the country will be happy to see their money go further there for the first since the early 2000s.
The post The Value of the Dollar and the Euro Are At Parity For The First Time in 20 Years – Here’s What That Means For Us appeared first on Essence.
