The euro hit a new low eight days ago against the U.S. Dollar, hitting $1.028/unit against the USD on Tuesday. This week, the official currency for 19 of the European Union’s member states reached parity against the U.S. dollar for the first time in 20 years.
In comparison to the US Dollar, Euro reaches parity and Greenback skyrockets in relation to a basket fiat currencies
The European Union’s goal to establish a fiat sovereign currency in its EU was set back in sixties. However, it wasn’t implemented until January 1999. In 2002, bills and currency began to circulate. Close to 24 years later, the euro is not doing well against America’s greenback, and the EU’s sovereign currency reached parity with the U.S. dollar on Tuesday, July 12.
Due to the significant inflation in the EU, a result of the massive monetary ease that occurred during the Covid-19 pandemic and the Ukraine-Russia conflict, the EU is now suffering. Prior to the war, the EU was getting around 40% of the EU’s gas from Russian exporters. As the U.S. currency has experienced significant demand, it was able to keep up with inflation. 20-year highA basket of fiat currencies will be used on Wednesday.
Germany posted its first goods trade deficit for three decades last week. It is difficult for analysts to see how the situation in the eurozone will improve over the next few months, according to Saxo Bank. “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,” strategists from Saxo Bank said on July 12.
The euro has met parity with the U.S. dollar in the past, as the fiat currency matched the dollar’s exchange rate back in 2002, the same year euro-based notes and coins were issued. At the time of writing, the EUR’s exchange rate against the USD is $0.9998. The U.S. dollar index remained stable this week despite the euro’s slump. tappedThis is a new record high of $108.56, which was not achieved since October 2002. Despite the record inflation in the U.S., America’s greenback has been extremely robust compared to most of the fiat currencies circulating across the global economy today.
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