The euro was once again briefly valued at par with the dollar on Monday. The Euro has been dropping against the US currency for some time and just before 10am the coins were worth exactly the same.
The recent rise in the value of the dollar is linked to fears of a recession in Europe. This is feared, among other things, by high rates of inflation and gas shortages. Higher interest rates in the US are also helping the dollar to move ahead against the euro.
Over a month ago, the euro and the dollar were already equal in value. This is also known as parity. It was the first time in twenty years that this had happened. A few days later, the euro was worth less than the dollar for a while, but then the single European currency rose again slightly.
The weakness of the Euro makes it more expensive for Europeans to buy dollars, for example to go on vacation to the United States. For Americans, vacationing in Europe is getting cheaper.
Importing crude oil into Europe will also cost more, because oil and other commodities are settled in dollars. This may be unfavorable for motorists who have to refuel. By the way, oil and fuel prices have been declining for several months.
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