July 22,2022
Just over 20 years have passed since the euro went into circulation. In 2008, when a euro was worth 1.58 US dollars, it reached its highest value against the dollar. The euro was still worth 1.21 US dollars at the start of 2021.
The European Union is fighting inflation. Inflation in Belgium is little around 10%. Russian energy supply being unpredictable has also harmed confidence in the euro. Recession, according to Belgian analysts, could affect Europe far more severely than other nations. The euro has held its value against a number of other currencies, but it has been losing ground against the US dollar since the US economy appears to be less affected by global problems. According to analysts, the dollar is still a safe haven during these difficult times.
Furthermore, although the European Central Bank is hesitant, the US Federal Reserve has raised interest rates.
Imports, notably those of energy products traded in dollars, increase in price when the euro is weaker. The cost of vacations in the US has also increased.
Exporters notice a bright spot: European exports are now less expensive. Analysts do not anticipate a sudden change in parity. In reality, the dollar may strengthen in the upcoming months.
Source: Flandersnews.be
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