The euro’s recent drop in value against the dollar comes at a "very unfortunate time," says ING economist Bert Colijn. He points out that the sharp rise in commodity prices generally has to be reconciled in dollars. "That ensures that the prices of food and energy, already the main drivers behind the far-too-high inflation in Europe, will remain high for longer."

Earlier this week, the euro had the equivalent value as the dollar for the first time in about twenty years. The value of the the European single currency has continued to fluctuate up and down a bit this week, even briefly trading for less than one dollar.

"The weaker euro is mainly because the traditional trade surplus of the eurozone has evaporated like snow in the sun," the economist says. For the first time in years, the eurozone imports more than it exports. “Obviously, this is mainly due to the huge increase in import prices, especially the higher energy costs that the eurozone now has to pay."

Colijn notes that the eurozone economy is getting worse. A brief recession later in the year is now the base scenario for the bank's economists.

https://nltimes.nl/2022/07/17/euros-fall-dollar-painful-commodities-soar-ing