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The exchange rate of the euro against the US dollar fell to 1:1, and the goods exported to Europe will be affected.

Time:2022-07-18 Publisher:Kevin Num:2832

At present, the global shipping industry is not as popular as it was two years ago, and the dock workers' strike adds an uncertain factor to port congestion. On the other hand, some strange phenomena have also appeared in the global economy.

Recently, the exchange rate of the euro continued to fall. As of the 15th local time, the parity level of the euro against the US dollar fell by 1:1, setting the lowest record in nearly 20 years

In February this year, the trading price of the euro was still around $1.15, and the euro has continued to decline since then.

According to the data, only 40% of the goods in the euro area are settled through the euro, while the dollar accounts for 50%. Most raw materials, including natural gas and oil, are settled through the dollar.

Experts said that as the exchange rate of the euro against the US dollar continues to fall, the real purchasing power of most people in Europe will be seriously affected.

In the past June, the consumer confidence index in the eurozone continued to decline, falling to -23.6. Moreover, the declining consumer demand in Europe will also exert certain pressure on China's foreign trade exports.

In fact, the recent sharp and rapid depreciation of the euro is mainly due to the recent economic recession in the eurozone. 

Besides, the economic differentiation and monetary policy differences between Europe and the United States have also exacerbated the trend of the euro's continued weakness.

Coupled with the impact of the conflict between Russia and Ukraine, Europe has been seriously impacted, and the recession of the euro zone is far more than that of the United States.

Foreign media reported that the "Beixi No.1" natural gas pipeline of Beixi natural gas pipeline company has suspended gas transmission at present. 

The industry said that Russia's suspension of natural gas transmission would aggravate the risk of European economy falling into recession.

At present, many countries in the world have experienced serious inflation, and some major developed countries have entered the interest rate hike cycle.

The European Central Bank is very cautious about raising interest rates due to economic recession and sovereign load risks.

The European Central Bank is expected to raise interest rates by 25 basis points at its recent meeting. Compared with Europe, the Federal Reserve has raised interest rates by more than 300 basis points this year, forming a clear contrast.

In fact, the sharp decline of the euro exchange rate has done more harm than good, and has also affected China's foreign trade exports.

Theoretically, the depreciation of the euro has a certain positive effect on buffering the soaring raw material prices affected by the war, and the depreciation of the euro can stimulate exports. but

In fact, the external demand of the eurozone will also decline, and the order volume will continue to decrease. The superposition with the sharp rise in import prices will cause the trade deficit in the euro zone.

In addition, for those European countries that issue bonds with dollar face value, it means that the cost of repayment will also be higher. Therefore, the depreciation of the euro will undoubtedly do more harm than good to Europe.

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