For the first time in twenty years, the value of the euro, the currency of the European Union, has fallen below one US dollar. The value of the euro has declined to $0.99 against a dollar. This is the first time that the value of one euro has gone below one dollar. However, the Euro later recovered and is currently trading at USD 1.0024.
Ever since the Euro came into play, it has always been a stronger currency than the Dollar. But the euro has fallen sharply since the outbreak of the Ukraine war. Since the war, its price has fallen by 12 percent so far. Now the value of the euro has gone below the dollar. Europe is facing a fuel crisis due to sanctions imposed on Russia. Europe used to import 40 per cent of its gas requirement from Russia. But after the fighting broke out, the European Union has cut oil imports from Russia.
On the other hand, the inflation rate in America has reached the highest level of 41 years, due to which all the currencies have weakened. This also includes the euro. There is a sentiment in the market that investors can withdraw their money, so the dollar is seeing strength. On the other hand, due to the energy crisis, inflation is at record levels across Europe, especially in the European Union, which has created conditions of economic recession. The European Central Bank says that it will increase interest rates to control inflation. After this decision, the fear of recession may deepen further.
Instead of the respective currencies of the member countries of the European Union, the practice of a single currency – the euro – was started. However, the euro came into existence only in 1999 as the official currency of 11 member countries. Greece adopted the euro two years later, but Sweden, Denmark and Britain have stayed out of it. Euro notes and coins were introduced in 12 countries on January 1, 2002. Since then these countries have lost their currency.