The value of a euro is decreasing toward a dollar
ODESSA, Texas (KOSA) -The value of a euro is nearing a dollar and experts are saying it could get worse.
Since Russia invaded Ukraine back in February, it’s had an effect on European countries in different ways.
One that hasn’t happened in a while, is the value of the euro changing.
For the first time since 2002, the euro’s value is nearing the value of a dollar.
One benefit is that if you plan to travel to Europe this summer, it’ll be a lot cheaper, because the exchange rate is more valuable.
Mickey Cargile, president of Cargile Investments, says that one of the downfalls this decrease brings is that it upsets the balance of trade between the United States and other countries. .
“The thing that it hurts are our exports. So it makes our exported goods less attractive and it makes it more attractive to import goods. So it hurts our balance of trade,” Cargile said.
One of the US’s biggest exports of 2021 was crude oil.
However, Cargile says that with the value of a euro going lower, it can help ease inflation.
“It does have some impact. When the dollar rises that makes oil cheaper internationally,” Cargile said. “So it can depress the price slightly for oil for gold, commodities things like that. That’s actually something that’s kind of welcomed right now because it will help ease inflation.”
European nations worry that a shut down of Russian gas supplies to Europe could lower the value of it.
Cargile says that the main cause of the decrease in currency isn’t just because of the war.
“The main cause are the changes in interest rates. Our fed is aggressively tightening interest rates, meaning they’re raising them, europe has not yet started to raise their interest rates.” Cargile said.
Another reason that’s making the value go down is due to high inflation and the risk of recession in Europe.
The Euro is used by nineteen European countries and is expected to soon have a 1:1 exchange rate to the dollar.
Americans traveling to one of the nineteen European nations that accept euros, can get a 15% discount today because of the exchange rate.
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