Dive into the features you want to see

Abortion alcohol alcohol free america Art artist spotlight awards beer Belfast best best looking Best New Music booze Brexit British Cannabis cbd Cheese chocolate Christmas climate change closure Coffee collaboration College Green Comedy cooking counter culture counterculture Cover Story Covid Culture DC Films Derelict Ireland Direct Provision Drink drug Drugs Dublin Dublin City Council Dublin International Film Festival easter Entertainment Environment equality Fashion feature feminism Festival Film First Listen Food gaeilge Gaming General News gift gifts Gigs Graphic Design guinness harm reduction Harry Styles healthcare Heaters Heatwave heist Hennessy Homelessness Housing HSE ice cream Identity instagram Interview introduction to ireland Irish Irish coffee Irish News irishmade justice Justice League Kanye West launch Leonardo DiCaprio LGBTQ+ List Lists Literature Living Hell Lockdown Index Made by District Made in Ireland magdalene laundries meme Mental Health menu merch metoo Michelin mural Music narolane new menu New Music News nightclub nom non-binary nphet One of everything Openers opening openings Opinion Pairing pancakes Photography Pints Podcasts Politics pop up pop ups potatoes Premiere presents Pride queer Ray Fisher reservations Restaurants restrictions rugby Science Shebeen Shite Talk shitetalk signature dish Skateboarding small batch Social Media Space Subset sustainability tacos Taxis Technology Television The Big Grill theatre Thumbstopper tiktok To Be Irish Top 10 Tracks Top Ten Tracks Traffic Trans rights Transport Travellers trends TV Ukraine Ultimate Food Guide vegan Visual Art vodka Weed where to eat whiskey wine Women's rights Workman's youtube
General News / July 12, 2022

What does the drop in the euro’s value mean?

Image: Unsplash
General News / July 12, 2022

What does the drop in the euro’s value mean?

Words: Ellen Kenny

It may just be a number, but the implications of the euro drop are disastrous.

The euro fell to the same value as the dollar today for the first time since 2002. No big panic, just a major recession looming over us all.

Although the euro has now risen slightly to 1.01 dollars, this is the largest and fastest drop in value the euro has faced in many years.

This shift means European companies and consumers will pay more for the goods and services they import. European exports, meanwhile, will become immediately cheaper in international markets.

During the global 2008 recession, the euro was still worth 1.28 dollars at its lowest point.

The euro has experienced a sharp loss in value since early February when it was worth over 1.13 dollars.

The sudden drop in value has led to record breaking inflation rates across Europe this summer. These economic shocks are expected to increase as war wages on in Ukraine.

Image: Google

You might think to yourself, what’s the big deal? It’s all just small numbers at the end of the day. But according to the experts, it’s a lot more concerning than that.

To match the euro’s drop in the value, the European Central Bank have announced an increase in interest rates across Europe by 0.25 in August and 0.5 in September. This rate hike will increase the repayments on tracker and variable mortgages. So if your landlord has a tracker mortgage on the property where you will, your rent will go up.

And according to expert economist Robin Brooks, “markets are made up of human beings who happen to care about levels, which gives parity a special psychological significance, not least since we haven’t seen this in 20 years. This is a big deal.”

A “sell the Eurozone” mentality has developed among investors due to growing economic uncertainty. Uncertainty discourages investment, and a lack of investment encourages uncertainty.

The dollar is looking a lot more attractive these days. So, as more investors rush to the US to hedge themselves against European uncertainty, the euro’s value will drop more. If it continues to drop, products will only get more expensive. As if they haven’t enough already.

This value drop comes on the same day that the EU has finally agreed to let Croatia adopt the euro themselves. Welcome to the club! You’ll hate it.

Elsewhere on District: Irish Twitter’s most cursed landlord stories