For the first time in nearly 20 years, the euro and U.S. dollar are at parity. That means the U.S. dollar gets you further throughout nearly all of Europe than it has in two decades.
Today, 1 EUR equals 1 USD.
Yes, it finally happened on Monday afternoon: The exchange rate between the euro and the U.S. dollar is now even, according to currently published exchange rates. That means $1 currently exchanges to 1 euro – the first time it has hit that mark since November 2002, signaling the market’s assumption that the European economy is heading for a deep recession as a result of Russia’s invasion of Ukraine.
With the change, European businesses and consumers will pay more for the goods and services they import while seeing an immediate decrease in the price of European exports on global markets.
From Portugal and Spain to Greece and all the way up to Finland, most major countries throughout Europe use the euro. The United Kingdom is a notable exception along with Iceland, Switzerland, Sweden, Norway, and Czechia.
Since early February, when it was worth over $1.13, the value of the euro has fallen dramatically. Fear that Russia, the primary energy supplier for the EU, will entirely cut off gas deliveries in response to Western sanctions has caused the slump to pick up speed in recent weeks. So far, 12 European Union nations have experienced a whole or partial decrease in Russian gas.
But throughout the European Union, the strong dollar is at play. Exchange rates fluctuate minute-by-minute, so we might not see an exact 1:1 exchange. But by Tuesday morning, it had been hovering just above that mark for nearly 24 hours.
It’s unclear how much longer this trend may last, though CNN quotes a financial expert who suggests the euro may actually continue sliding if Europe and the U.S. slide into a recession.
(With inputs from agencies)
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