If you either put yourself in the list of currency savvy people, or you are the one that likes to compare major currencies of the world, you must know that current financial position of the market has nearly affected all of us. It is regardless of where on earth, you are living and how you are spending your money. In this article, I am going to talk about why the euro is falling and what will be the impact of this situation in your daily life.
The Euro disease
The next big thing that will rock the market would like to be about the euro that is falling. The euro zone that contains over 16 countries is using a single currency euro, so every party is likely to be affected. In this current financial year, the euro has seen a decrease from 1.50 euro/1USD to 1.28 euro/1 USD. In other words, about 15% decrease in the value of euro is observed. All of this is due to the debt crisis of Greece, which has affected many nations across Europe.
To settle the Greece issue, an agreement has been signed through which Central banks of Europe will provide to monetary add to the Greece. However, still the issue of euro is there and is becoming a threat. Another threatening thing for Europe is that Greece’s issue is spreading and now Portugal and Spain are the next target. The flood is spreading everywhere and going in all directions. European central bank said that a few more countries are not working as per standards, so they are likely to join the list.
The cure for the euro sickness is in the short supply from the central banks. This would take a lot of time to recover. The question is that relatively stronger countries like Germany should help the neighbors or not? Investors are concerned that for how long this stand along the currency euro will survive because its value is decreasing in comparison with other currencies.
How customers will be affected?
The next important thing that appears in the mind is that how the life of people’s will be affected by the declining position of the euro. The immediate impact would be on the prices of goods and services that are being produced within Europe. If a suit cost $1000 for American shoppers, now it will be sold at 20% lesser price. The downside is that all the production cost will remain as it is, so in the end it will be a loss to the producers.
If you are dealing with an automobile industry, then you must be feeling lucky all this year. Now purchasing a car would save over 15%-20% of your cost. Hence, you can enjoy the same benefits at a lower cost.
Impact of Euro on the investors
Minor fluctuation in the currency is a normal and an ongoing thing. However, when a currency that has huge following falls, a lot of people are affected from that situation. The falling of the euro has left many negative impacts on the international companies. Stock indexes are falling continuously across all the Europe. The investors are now fragile, and they are not spending much on the purchasing. They are only waiting to see how things will unfold in the future.