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Worldwide Inflation Has Caught Up To The Euro In Parity
For the last week, the Euro has been dropping in value. Today, July 13th the Euro has officially reached the value of the dollar for the first time in 20 years! Bloomberg News reports that the 12% decline comes as a result of multiple factors adding pressure to the Euro. The war in Ukraine has some part to do with this as the growing risk that Russia cuts off gas exports. The Ukraine-Russian conflict has upended food supplies and sent energy prices soaring around the world, particularly impacting the European Union, where many countries have relied heavily on Russia’s fossil fuel imports. Unfortunately, some analysts say parity may not be the endpoint, but merely a stepping stone to further weakness.
Who it hurts/ benefits:
This is devastating for the European Union, but something American travelers will be benefiting from in the weeks to come. The now favorable exchange rate means travelers’ dollars will go further when making purchases abroad. CNBC reports, that due to Euro parity “Americans traveling to one of the 19 European Union countries are getting a 15% discount on purchases today relative to a year ago.”
Just a few months ago, traveling to countries in the European Union means that American spending money while abroad was cut short because of the high conversation. Touring anywhere in the EU right now is equivalent to what one would spend in any city in the US. If you’ve been wanting to book a trip to Europe, now is the time. However, let us not all jump at once.
It is still a crazy summer to travel as all airlines are experiencing staff shortages, flight delays, and cancelations. In an open letter to passengers, John Holland-Kaye (CEO of Heathrow Airport, UK) shared the decision saying that “over the past few weeks, as departing passenger numbers have regularly exceeded 100,000 a day, we have started to see periods when service drops to a level that is not acceptable… Our colleagues are going above and beyond to get as many passengers away as possible, but we cannot put them at risk for their own safety and wellbeing.” The London airport will limit passengers to 100,000 a day until September 11, as it struggles to cope with high demand and a lack of resources.
It is possible that as the Euro continues to decrease in value, and travelers start to set their eyes on Europe for a getaway, other airports could follow in Heathrow’s footsteps. Thankfully, no other airports have released similar statements.