The euro rate is now in its seventh consecutive month of decline, its longest losing streak since the spring of 2000. Unfortunately, most experts see no end in sight until Europe addresses its troubling economic issues. The situation in Greece continues to weigh heavily on the euro. But it was bleak economic reports out of Hungary that sent the euro tumbling to a four-year low in early June.
The euro is particularly weak against the American dollar. On Friday, June 4th, it closed below the $1.20 mark for the first time in four years. The euro is now dangerously close to the $1.18 level, where the currency first traded when it was introduced in January, 1999. Though the pound has also been under pressure of late, it has still traded much better than the euro. At 85p against the decimated euro, the pound appears comparatively healthy. What does the fall of the euro mean for Europe?
As you might expect, the weakness of the euro has had far-reaching effects for every country that uses it. For one thing, the stocks and bonds of businesses in these nations are under pressure as European stock markets have fallen across the board.
It has also had a profound effect on certain sectors of these economies. For example, the tourism industry is taking in less money from guests who use the dollar or the pound because those currencies are presently much stronger than the euro.