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On 5 November 2024, the day of the US elections, the euro-dollar exchange rate stood at 1.09 (€1 was worth $1.09). By 5 January 2025, the rate had fallen to 1.03. While this might appear modest, it represents a 5.5 percent depreciation of the euro against the dollar in two months

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We're nearly at euro-dollar parity again — why that isn't good news

The year 2022 was the last time the euro reached parity and even fell below the dollar.

This was largely due to the energy crisis: as the euro area is a net importer of fossil fuels and the US a net exporter, the surge in energy prices worsened the euro area's terms of trade, causing the euro to depreciate against the dollar.

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On 5 November 2024, the day of the US elections, the euro-dollar exchange rate stood at 1.09 (€1 was worth $1.09). By 5 January 2025, the rate had fallen to 1.03. While this might appear modest, it represents a 5.5 percent depreciation of the euro against the dollar in two months

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Author Bio

Judith Arnal is a Spanish economist with the Real Instituto Elcano think-tank and the Centre for European Policy Studies.

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