9,312.13 TRY BIST 100 BIST 100
5.28 CNY CNY CNY
43.56 EUR EUR EUR
38.31 USD USD USD
0.12 CNY CNY/EUR CNY/EUR
46.74 TRY Interest Interest
66.21 USD Fossil Oil Fossil Oil
41.10 USD Silver Silver
488.00 USD Copper Copper
99.70 USD Iron Ore Iron Ore
325.00 USD Shipbreaking Scrap Shipbreaking Scrap
4,091.06 TRY Gold (gr) Gold (gr)

What does Euro/Dollar parity mean? What are the effects on exports and especially on the steel industry?

What does Euro/Dollar equalization mean? We have compiled its effects on exports and especially on the steel industry. Details are here...

What does Euro/Dollar parity mean? What are the effects on exports and especially on the steel industry?

The parity is briefly defined as the ratio of the currencies of the countries to each other. It is obtained by dividing the currency value by the value of the other currency. 

The dollar is gaining in value in global markets. Euro/Dollar parity has seen its lowest level since 2002. For the first time in 20 years, 1 euro was equaled to 1 dollar.

How are Turkey, Europe and the USA affected by this situation?

EU and US currencies have been hovering at the same value level in recent days. Turkey provides the largest share in exports, especially in the iron and steel industry, with its exports to Europe.

Buying raw materials in dollar terms, Turkish steel producers were gaining an advantageous position by exporting to Europe in Euros.

The falling euro/dollar parity has seriously affected the advantageous steel exports of the Turkish steel industry to Europe.

Turkish producers will have to put more effort into dollar markets in order to increase exports in dollar terms and to reduce the market share of exports made in euro.

When was the last time the euro was equal to the dollar?

The euro had not fallen below $1 since July 15, 2002. In the last week, it has seen a little less than 1 dollar from time to time.

The euro reached an all-time high of $1.18 shortly after its launch on January 1, 1999, but then started a long decline and was leveled at $1 in February 2000. 

In October 2000, it reached its lowest level with 82.30 cents. It bounced back above par in 2002 as large trade deficits on Wall Street and accounting scandals put pressure on the dollar.

The dollar remains a safe haven for investors in times of uncertainty. 

Why is the euro falling?

Many analysts attribute the euro's decline to expectations of rapid rate hikes by the US Federal Reserve (Fed) to combat inflation, which has reached its highest level in the last 40 years (9.1%).

As the Fed raises interest rates, the rates of interest-bearing investments tend to rise as well. 

If the Fed raises rates more than the European Central Bank (ECB), investors are more likely to shift their money from euros to dollars due to higher interest rates. In order for this transaction to take place, investors sell euros and buy dollars, which pulls the euro down and the dollar up.

The ECB also announced that it will raise interest rates next week and add another hike in September. But if the economy goes into recession, that could stop the ECB's rate hikes. Because rising interest rates cause investments in the business world to slow down.  

The stronger appearance of the US economy in the last period also means that the Fed may continue to tighten and widen the rate gap.

Comments

No comment yet.

Only +plus subscribers can access this content.

SUBSCRIBE now to share your thoughts on the markets and get more comments.
SUBSCRIBE If you already have an account Sign In

Most read news

Capacity utilization rate decreased in April

Friday, April 25, 2025

Türkiye's consumer confidence index decreased again in April

Tuesday, April 22, 2025

House sales in Türkiye on the rise in March

Wednesday, April 16, 2025

Surprise interest rate hike by the Central Bank

Thursday, April 17, 2025

India seeks to fast-track trade deal with US

Friday, April 11, 2025
Follow List
Expand
Your watch list is empty

Add your favorite commodities for quick access and don't miss the latest price change news.


There are no news categories you follow
Edit Notification Preferences
E-bulletin subscription
Sign up to receive the latest news and daily iron prices by e-mail and sms
Become a Plus Subscriber Now!
Try it free for 3 days!
Subscribe Now
Neutral Prices
Be informed
Provincial Iron Prices
Comments and Analysis
Subscribe Now