The Euro slipped to its lowest value in 20 years compared to the dollar on Tuesday, according to CNBC. Analysts are noting that it could drop even further.
“Our outlook and our trades and our position on the strategist side are definitely biased towards further euro depreciation from where we are now,” Luis Costa, head of Central and Eastern Europe Middle East and Africa strategy head at Citibank, told “Squawk Box Europe.”
Costa thinks that the Euro could get weaker against the dollar. The USD is currently strong because currencies tend to get a boost after regulatory institutions raise interest rates, which the Federal Reserve has done three times in 2022.
The Euro has since scooted upward a bit as of later Tuesday morning, going up to 0.9968 Euros to 1 USD.
The war in Ukraine and the subsequent pain to Europe’s energy markets have affected the Euro’s decline, per Bloomberg. China’s slower growth post-pandemic has also thrown a wrench into things, Costa told CNBC.
Another complicating factor: On Monday, gas prices for wholesale in Europe ticked up again. Russia began unannounced repair work on its most important pipeline to Germany, Nord Stream 1, the outlet added.
The current dollar to euro ratio means that it is still a good time for people in the U.S. to travel to Europe.
When it’s the other way — i.e., the dollar is weaker than the Euro — it’s a “total sticker shock,” Ann Castagna Morin, founder of Your Dream Vacation said.
Morin added that, because of the weaker Euro, she almost got a free night on her European vacation.
