What happens when a euro is worth less than a dollar? What is the impact on your portfolio? Find out about the effects of the fall of the European currency against the American one.
In the summer of 2022, the euro reached its lowest value ever and, for the first time, was worth less than the dollar. This devaluation, which turns out to be a reflection of inflation and the war, is yet another pressure factor on family budgets.
Currency fluctuations, especially those relating to currencies such as the euro and the dollar, always have an impact on our accounts. In an already unfavorable context from an economic point of view, having a weaker euro than the US currency brings disadvantages.
Just think that the price of a barrel of oil is quoted in dollars. Now, if a euro is worth less than a dollar, it becomes more expensive to buy oil, which means that the fuel bill increases.
But not only. In practice, all imports paid in dollars (which include several raw materials) are also more expensive.
However, a drop in the euro could be beneficial for exports and even domestic tourism, attracting more Americans. Traveling in the opposite direction becomes less attractive for Portuguese citizens, as they will spend more.
In this Positive Balance article can better understand all the effects of this devaluation.
Devaluation of the euro against the dollar: good or bad for your wallet?
The euro goes down and the dollar goes up. Do you know what this means for your accounts? Is it good news or will it have a negative impact on your finances? This article from Saldo Positivo explains the effects of the devaluation of the euro.
Learn more about other contents of Saldo Positivo.
O Positive Balance is Caixa Geral de Depósitos’ financial literacy website and aims to make life easier for the Portuguese with regard to money management with the regular publication of articles, news, guides and infographics.