Various-Euro/Dollar/Exchange Rate

Shotlist

FILE: Frankfurt, Germany – Date Unknown (CCTV – No access Chinese mainland)
1. Various of European Central Bank sign
2. Euro sign

Beijing, China – July 12, 2022 (CCTV – No access Chinese mainland)
3. SOUNDBITE (Chinese) Wang Shuo, professor, School of International Relations and Diplomacy, Beijing Foreign Studies University:
“A currency slump is both a reflection of economic fundamentals and a further blow to the economy. It should be said that the sharp decline in the exchange rate of the eurozone has a great impact on the European economy. Firstly, though the fallen exchange rate is overall good for exports, external demand in the eurozone is now actually falling. Moreover, import prices and turnover are both rising sharply. Therefore, the eurozone has been running a trade deficit since March, and it keeps widening now. Germany, eurozone’s biggest economy and exporter, also ran a deficit for the first time since 1991.”

FILE: Beijing, China – Date Unknown (CCTV – No access Chinese mainland)
4. Various of euro banknotes going through counting machine

FILE: Shanghai, China – Date Unknown (CGTN – No access Chinese mainland)
5. Various of U.S. dollar banknotes going through cash counting machine

Beijing, China – July 12, 2022 (CCTV – No access Chinese mainland)
6. SOUNDBITE (Chinese) Wang Shuo, professor, School of International Relations and Diplomacy, Beijing Foreign Studies University:
“Secondly, euro devaluation is also the decline of euro credit, and also a wealth shrink. If the euro keeps falling, it will lower expectations for the future of the currency, and there will be further euro selling, which will further depress the exchange rate. Many businesses in the eurozone now settle their accounts in dollars, so the current economic downturn is tantamount to the loss of the exchange rate. Therefore, for the eurozone economy, the current devaluation of the euro will definitely bring more harm than benefits.”

FILE: Exact Date and Location Unknown (CCTV – No access Chinese mainland)
7. Various of euro coins, banknotes

Brussels, Belgium – July 12, 2022 (CGTN – No access Chinese mainland)
8. SOUNDBITE (English) Laura Makin-Isherwood, CGTN correspondent:
“Well, of course anything bought in dollars will be far more expensive. You’re not going to get as much goods for your euro at all if you head to the shops. If you’re paying utility bills, that is all going to be impacted. Around half of all imports that come into the eurozone are paid for in dollars. So there are a lot of products that could see prices rising, which is also happening of course, because of the growing and inflating interest rates and inflation rates that the eurozone is experiencing at the moment. What it could mean though for some industries that export their goods in dollars is that they see a bit of a boost, like the aerospace industry, the automotive industry as well, that could have a positive impact on them. And they could also see a bit of a tourism boost as well. Should it be the Americans, for instance, pay for their holidays in U.S. dollars. They could decide to come to Europe because it’s seen as a cheaper destination now.”

FILE: Frankfurt, Germany – Oct 24, 2019 (CCTV – No access Chinese mainland)
9. Various of city view, buildings, bridge, pedestrians

Storyline

For the first time in two decades, the euro on Tuesday falls to parity with the U.S. dollar, meaning one U.S. dollar is equal in value to one euro.

The single currency of 19 European Union countries has not fallen to or below a one-to-one exchange rate with the U.S. dollar since December 2002.

The euro continued to fall from Tuesday morning and traded at par with the U.S. dollar in a short-term in intraday trading.

After reaching parity, the euro exchange rate picked up again slightly. As of 16:20 local time (1420 GMT), euro was trading for 1.005 dollars in the currency market.

Euro has slumped 10 percent against U.S. dollar since the start of the year, according to data from European Central Bank (ECB).

“A currency slump is both a reflection of economic fundamentals and a further blow to the economy. It should be said that the sharp decline in the exchange rate of the eurozone has a great impact on the European economy. Firstly, though the fallen exchange rate is overall good for exports, external demand in the eurozone is now actually falling. Moreover, import prices and turnover are both rising sharply. Therefore, the eurozone has been running a trade deficit since March, and it keeps widening now. Germany, eurozone’s biggest economy and exporter, also ran a deficit for the first time since 1991,” said Wang Shuo, a professor with the School of International Relations and Diplomacy under the Beijing Foreign Studies University.

What’s more, euro credit decline will further intensify euro selling, meaning enterprises will bear the loss of exchange rate, he said.

“Secondly, euro devaluation is also the decline of euro credit, and also a wealth shrink. If the euro keeps falling, it will lower expectations for the future of the currency, and there will be further euro selling, which will further depress the exchange rate. Many businesses in the eurozone now settle their accounts in dollars, so the current economic downturn is tantamount to the loss of the exchange rate. Therefore, for the eurozone economy, the current devaluation of the euro will definitely bring more harm than benefits,” said Wang.

Laura Makin-Isherwood, a correspondent with China Global Television Network (CGTN), has this to say about the the impact on millions of people across the eurozone.

“Well, of course anything bought in dollars will be far more expensive. You’re not going to get as much goods for your euro at all if you head to the shops. If you’re paying utility bills, that is all going to be impacted. Around half of all imports that come into the eurozone are paid for in dollars. So there are a lot of products that could see prices rising, which is also happening of course, because of the growing and inflating interest rates and inflation rates that the eurozone is experiencing at the moment. What it could mean though for some industries that export their goods in dollars is that they see a bit of a boost, like the aerospace industry, the automotive industry as well, that could have a positive impact on them. And they could also see a bit of a tourism boost as well. Should it be the Americans, for instance, pay for their holidays in U.S. dollars. They could decide to come to Europe because it’s seen as a cheaper destination now,” she said.