They also have raised fears about governments needing to ration natural gas to industries like steel, glassmaking and agriculture if Russia further reduces or shuts off the gas taps completely.

And Russia has been cutting back natural gas supplies to the European Union, which EU leaders described as retaliation for sanctions and weapons deliveries to Ukraine.Įnergy prices have driven euro-area inflation to a record 8.9 percent in July, making everything from groceries to utility bills more expensive. Fears that the war in Ukraine will lead to a loss of Russian oil on global markets have pushed oil prices higher. to keep industry humming and generate electricity. Europe is far more dependent on Russian oil and natural gas than the U.S. More than anything, high energy prices and record inflation are to blame. Expectations that the economy would see a rebound after turning the corner from the COVID-19 pandemic have been replaced by recession predictions. While constantly changing, the euro has dropped just below a value of $1 this week.Ī currency’s exchange rate can be a verdict on economic prospects, and Europe’s have been fading. It means the European and American currencies are worth the same amount. Here’s why the euro’s slide is happening and what impact it could have: What does euro and dollar parity mean? But psychology is important, and the euro’s slide underlines the foreboding in the 19 European countries using the currency as they struggle with an energy crisis caused by Russia’s war in Ukraine.

It’s a psychological barrier in the markets. READ MORE: Europe’s central bank raises interest rates for first time in 11 years The euro has fallen below parity with the dollar, diving to its lowest level in 20 years and ending a one-to-one exchange rate with the U.S.

20 euros cents to dollars