The euro hits its lowest level against the dollar since it came into circulation in 2002

The euro is sinking. The European currency fell below the parity threshold with the dollar on Monday, August 22, to a level not seen since the year of its entry into circulation in 2002. The euro lost 0.84% ​​on Monday afternoon, to $0.9951. The greenback, for its part, is benefiting from the successive tightening of the American Federal Reserve (Fed).

More expensive imports

The main consequence, and the most direct, is that this fall in the euro is fueling the rise in prices, in particular those of hydrocarbons. “It’s rather bad news because it will feed inflationexplained in July on franceinfo Jean-Paul Pollin, member of the Circle of economists. For example, the price of oil is fixed in dollars and if the European currency falls against the American currency, it means that the price in euros will be higher.

The strength of the dollar accentuates already devastating inflation for consumers and businesses. “Europe is preparing for another closure of the Nord Stream 1 gas pipeline later this month”, reminded AFP Craig Erlam, an analyst at Oanda. Gas giant Gazprom has warned that gas deliveries will be halted for “maintenance” from August 31 to September 2, at the risk of reigniting fears of a shortage in Europe, where Russia is accused of energy blackmail.