Global Turmoil Makes Euro Cheap For Americans | Eastern North Carolina Now | As the global economy continues to see a variety of disruptions, the euro is approaching parity with the dollar for the first time in 20 years.

Coronavirus Disease 2019 (COVID-19)
    Publisher's Note: This post appears here courtesy of the The Daily Wire.The author of this post is Ben Zeisloft.

    As the global economy continues to see a variety of disruptions, the euro is approaching parity with the dollar for the first time in 20 years.

    The euro was established by the European Union as its official currency in 1999. For most of the past two decades, exchange rates have been near or above $1.10 per euro on the foreign exchange market - meaning that Americans seeking to acquire euros needed to provide a greater share of dollars than euros they received.

    Over the past year, however, the exchange rate has quickly dropped from $1.22 per euro to $1.02 per euro, according to Bloomberg Markets. The phenomenon implies more favorable conditions for Americans seeking to conduct business or travel in European countries that use the currency.

    "We are partly observing a return to a longer run trend, which began in the summer of 2008, where the euro gradually depreciates against the dollar," William Luther, the director of the Sound Money Project at the American Institute for Economic Research, told The Daily Wire. "That trend was interrupted by the pandemic, with the euro appreciating considerably throughout much of 2020 before reversing course in January 2021 and returning to its pre-pandemic level by March 2022."

    The most recent drop in demand for euros is due to the Russian invasion of Ukraine, which led to higher natural gas prices and reduced production throughout Europe. "Barring any further calamities, the exchange rate will likely return to its pre-pandemic trajectory as Europe's energy problem wanes," Luther, who also works as an economics professor at Florida Atlantic University, added.

    Indeed, energy prices have risen across Europe as supply from Russia is threatened. Citizens of Germany, for example, are purchasing gas at $7.27 per gallon as of July 4. In Spain and France, prices at the pump are $8.23 and $8.00, respectively. Prices are especially high in Scandinavia - $8.47 in Sweden, $9.50 in Finland, $9.48 in Denmark, and $9.75 in Norway.

    Many countries are receiving less than half of their usual volumes of natural gas from Russian state-backed company Gazprom, according to Reuters. German gas importer Uniper recently requested that the nation's government provide a $2 billion loan amid reduced energy supply from Russia, German state-run news outlet Deutsche Welle reported on Friday. Economy minister Robert Habeck affirmed that the government "will not allow a systemically important company to go bankrupt and cause turbulence on the global energy market as a result."

    Rising energy prices are complicating the battle against high inflation in the United States and the European Union. Because inflationary pressures in Europe are more strongly driven by "real supply disturbances," Luther said that the higher price levels are "more excusable" across the pond. Both American and European policymakers, however, "have done little to counter rapidly rising prices" until recently, he added.

    "The European Central Bank cannot do much to increase the supply of natural gas. The situation is very different in America, where much of the inflation experienced over the last year was due to easy monetary policy," Luther explained. "The Federal Reserve could have - and should have - offset the surge in nominal spending observed over the last year. If it had, prices would be lower in the U.S. and in Europe today."

    The Federal Reserve's benchmark interest rate is now pegged between 1.5% and 1.75%, while the European Central Bank has a negative interest rate that policymakers hope to bring above 0% by September. Both central banks have a long-term inflation goal of 2%, although inflation rates in both the United States and Europe are increasing above 8%.
Go Back


Latest Op-Ed & Politics

I watched with great interest the small comments made by DOJ Attorney General Merrick Garland, in an even shorter press conference, about a most serious matter, and yet, I took nothing he said seriously.
On Friday, Israel Defense Forces announced Operation “Breaking Dawn” to attack Palestinian Islamic Jihad terrorists in the Gaza Strip. Reports state that the IDF killed Tayseer al-Jabari, a senior Islamic Jihad terrorist commander who supervised terrorist forces.
Former President Donald Trump avoided incriminating himself in a deposition with New York A.G. Letitia James by pleading the fifth amendment right to remain silent.
Florida Republican Governor Ron DeSantis sent law enforcement officials to remove woke State Attorney Andrew Warren of the 13th Judicial Circuit, who was backed by Democrat mega donor George Soros, from office this week.
An independent Pentagon review of a drone strike that killed 10 Afghan civilians, including 7 children, during the final days of the U.S. military’s presence in Afghanistan recommends that no disciplinary action be taken.
President Joe Biden’s spending agenda climbed another hurdle and now appears to have enough votes to pass the Senate after Sen. Kyrsten Sinema (D-AZ) agreed to the package Thursday.
The FBI raided the home of Nicholas Cage in the early morning hours Friday after an anonymous tip that he had stolen the Declaration of Independence.
Former television news anchor Kari Lake has won the Arizona GOP primary to be the state’s next governor.


“A Tale of Two Carts” - Featuring the Heartbreak of Working Families Being Crushed by Bad Biden/Beasley Policies had Inaccurate Data
Democrat President Joe Biden claimed that reports from multiple mainstream newspapers that the administration could pay illegal aliens who were separated at the border under the previous administration up to $450,000 each to settle lawsuits were untrue.
U.S. District Judge William Osteen is ending his injunction of North Carolina's abortion law, allowing a ban on most abortions after 20 weeks to take effect.
California State Senator Scott Wiener (D-San Francisco) was interviewed Thursday by The Washington Post about the response to his state’s monkeypox outbreak and said that people have to make their own decisions about having sex.
“We hold these truths to be self-evident,” begins the second paragraph of the Declaration of Independence. And yet the self-evident truth of unalienable rights has never been fully lived as what is true in America.
44% say Trump raid made them trust FBI less
Los Angeles City Council members will consider passing an initiative Friday that could force hotels to report vacancies and house homeless individuals in empty rooms.
The Department of Defense estimates that communist China will increase their stockpile of nuclear weapons by at least 500% over the next 10 years, which is just one area of concern for America’s top military minds.


Back to Top