The euro is worth more than $ 1.10 on Thursday morning for the first time since April last year. The exchange rate of the US currency fell due to relatively favorable inflation figures in the US.
US inflation was 5 percent in March, which was a windfall. Because the monetary depreciation is less than expected, investors expect fewer rate hikes in the US in the near future. That makes the dollar less attractive.
Last fall, the dollar and the euro were worth roughly the same for a short time. That was the first time in twenty years. This was because the US central bank, the Federal Reserve, started rate hikes earlier than the European Central Bank (ECB). In the meantime, the ECB has also raised interest rates a few times, causing the euro exchange rate to rise once more.
A lower dollar exchange rate might be beneficial for us. US goods are becoming less expensive, which also applies to holidays to the US. It can also have a positive effect on prices at the pump. Oil is often paid for in dollars and is therefore slightly less expensive for Europe due to the low dollar exchange rate.
On the other hand, it is less favorable for exports. It will be more expensive for Americans to buy European goods and to vacation here.
