Record low: euro worth less than one US dollar

The euro's drop to below US dollar parity is increasing concerns about the economy in the EU. This week the EU's single currency fell to a new 20-year low of 0.9909 euros to the dollar, stoking fears of a recession. Commentators discuss the causes and consequences.

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La Repubblica (IT) /

Justified fears of recession

Europe is paying a higher price for the crisis than the US, La Repubblica explains:

“There are fears of recession - exacerbated by the insane rise in gas prices - with inflation showing no signs of abating, at least not in Europe. These are fears that exist on both sides of the Atlantic but are less pronounced in the US. This explains why the euro is paying a higher price - and not just since today. ... The market's reasoning is simple: the rise in gas prices is hitting Europe harder than America, just as the consequences of the war in Ukraine are more severe on this side of the Atlantic and are testing the resilience of Germany in particular, once the driving force of the Eurozone.”

La Vanguardia (ES) /

Decoupling was never a good idea

La Vanguardia argues that the US Federal Reserve and the ECB should coordinate their policies:

“The downward slide of Europe's single currency has accelerated as a result of the Federal Reserve's determination to further tighten its monetary policy. ... The risk in Europe is that a sharp rise in interest rates could curb inflation but trigger a crisis in the most indebted countries. ... The decoupling of the monetary policies of Europe and the US has never brought any advantages. ... The two central banks would therefore do well to coordinate their actions. The ECB faces difficult decisions.”

Iswestija (RU) /

Europe's economic problems are not the cause

It's not the euro that is weak but the dollar that is strong, explains stockbroker Viktor Shcheglov in Izvestia:

“The economic problems in the Eurozone are not the main factor behind the crash of the EUR/USD exchange rate. More significant is the strengthening of the dollar. Unfortunately everyone suffers when the euro is weak, as one of the main consumers becomes poorer. This also affects the US, Russia and China. At the same time, a strong dollar means that many US companies have to reckon with declining revenues due to their products becoming more expensive and shrinking demand.”