The euro (EUR) officially equaled the dollar earlier this week (USD). The USD/EUR exchange rate had reached this level for the first time since 2002, though. Learn more about this historic occurrence and the development of cryptocurrencies in relation to it in this article.
Parity between the euro and the dollar
These days, one euro is about equal to one dollar. In other words, in the currency market, a dollar may now buy a euro. The last time the euro was weaker than the dollar was in November 2002, and even then, the euro zone’s currency was still in its infancy. The latter then steadily strengthened its position and maintained above the dollar for a considerable amount of time.
In actuality, this stability was disturbed by Russia’s invasion of Ukraine. a situation that, as a result of the potential for an energy crisis in the area, rattled the European economy. In this setting, the euro started to decline in value in February 2022. It then picked its speed during the month of June before finally reaching a level comparable to the dollar in the middle of July.
The dollar is up, though, if the euro is down. In reality, the American Federal Reserve (FED) increased its main interest rates to combat June’s 9.1 percent annual inflation rate. The dollar instantly rose following this news.
The purchasing power of European households may be impacted by the dollar-fixed price of groceries, in particular, by the euro-dollar parity. Additionally, it can result in higher manufacturing costs for some businesses in the eurozone that import their raw materials from the US. what highlights inflation further.
Additionally, there are ways to improve the competitiveness of European exports. On the other hand, it would be a significant blow to fiat money and the economy as a whole if the euro declined in value relative to the dollar and the latter also lost market value.
What is the state of cryptocurrencies?
Cryptocurrencies have gone through a true tribulation since the start of the bear market. The value of bitcoin (BTC), on the other hand, has decreased by almost 70% since reaching an all-time high of almost $69,000 in November last year. It has been fluctuating recently around $20,000 and usually between $19,000 and $22,000. Having said that, the majority of the market’s cryptoassets have this downward trend on their charts. Additionally, a lot of cryptocurrency businesses (such as Celsuis, Terra, etc.) filed for bankruptcy, which led to huge losses for investors.
However, a lot of experts believe that the bear market is still far from over. Despite the fact that several indications are already pointing to a sizable drop, another negative cycle is just around the corner. As a result, investors will be able to amass additional tokens, and new players will be able to join the game. However, it shouldn’t stay too long and should be followed by a little increase.
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