The value of the euro, as compared to the U.S. dollar (USD), has hit a 20 year low.
What Happened: The value of the euro fell 1.3% to hit a value of $1.029 when compared to the USD, according to CNBC. Many economists are predicting that the European economy will be at risk of recession, especially if Russia cuts gas supplies.
Related Link: As US Economy Weathers Inflation, GDP Growth Turns Negative: Are We Headed For A Recession?
In June, the European Central Bank reported an 8.6% increase in inflation. The bank then announced that, for the first time in 11 years, interest rates would increase across Europe. And the July Sentix Economic Interest Index indicated that morale among European investors hit its lowest point since May 2020.
Why It’s Important: Many economists and analysts have been predicting a U.S. recession for months. It now seems that the 19-country euro zone will likely experience the same economic hardships on the heels of COVID-19 lockdowns and increasing inflation.
More nations will likely enter a recession, causing families all over the world to struggle financially in a post-pandemic society.
Photo: Courtesy of Ibrahim Boran on unsplash
