Eurozone’s Fiat is plunging – and probably won’t bounce back soon
The euro has weakened against the US dollar since the beginning of 2021, from around USD 1.23 to its current exchange rate of USD 1.13. That’s a fall of about 9%, which is significant, especially since these are the two major currencies of the world. The drop has also intensified in November, falling 3% since the turn of a month, which has seen violence in European capitals over COVID restrictions.
The decline should be seen in a broader context, though. The euro is still stronger than a couple of years ago, when it was about USD 1.10. It also went through some heavy weekly volatility from February to April 2020 in the early part of the COVID pandemic, bouncing between about USD 1.07 and USD 1.13 at a time when lots of investors were fleeing to the US dollar for safety and there was much uncertainty about what lockdowns would mean.
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