What are the losses after the fall of the euro?

We will talk about the consequences of the fall of the euro currency.

In July 2022, the value of the euro was equal to the dollar for the first time in nearly 20 years

The euro, which reached its peak in 2008, was about 1.6 dollars

I mean, one hundred euros was equal to 160 dollars

But the euro fell further, and on September 27, 2022, it reached a price of $0.963

One hundred euros became equivalent to only 96.3 dollars

Why did the euro fall?

There are many reasons behind the decline of the euro

The value of any currency is determined by supply and demand, the greater the demand for a currency, the higher its value.

For example, the demand for the euro increases as the export of goods from the eurozone increases, but after the Russian-Ukrainian war, Russia cut gas supplies to Europe and the deterioration of European industrial production

Europe is importing more than it exports, and this is why the demand for the euro has decreased and its value has decreased.

But who are the winners and losers from the euro's decline?

The first beneficiaries of the euro’s decline are the European export companies. The more the euro depreciates, the more importers will buy European goods because they will be less expensive. Therefore, European companies’ exports will increase and their share in the global market will increase.

For example, consumers in America will buy imported goods from Europe at a lower cost because the value of the dollar is higher than the value of the euro.

And American tourists and any country whose currency is linked to the dollar will pay a lower cost during their stay in Europe. For example, when exchanging 1000 dollars, they will have about 1.038 euros with them, and this means that they buy more with the same amount of dollars.

The losers of the weak euro

The first of them is the industrial sectors in Europe, such as cars and aircraft, because they import raw materials from abroad and are paid in dollars, and therefore the cost of importing them is greater due to the decline of the euro

US exporters could be affected because their products would become more expensive for importers in Europe, who would turn to other sources where it would be cheaper for them to purchase goods.

Also, the energy sector in Europe will be severely affected by the decline in the euro, since the cost of fuels becomes high, especially petrochemical companies, as these companies pay a double bill for the rise in energy prices, and for European sanctions on Russia

Consumers in Europe will also suffer from the depreciation of the euro because they will face a large increase in the prices of goods, which will make them reluctance to buy them.