Euro falls to lowest level versus dollar since 2003
The value of the euro has plunged to its lowest level against the US dollar since 2003 as the Swiss National Bank (SNB) decided to abolish an exchange-rate policy.
The euro fell against the US dollar on Friday hitting about USD 1.15, down from around USD 1.4 less than a year ago.
The 11-year low came after the SNB decided a day earlier to stop buying 2 billion euros a day to keep the Swiss franc cheaper than the eurozone currency.
The SNB said as it announced its decision to scrap the three-year-old policy that the Swiss franc was no longer in a period of “exceptional overvaluation,” therefore, “enforcing and maintaining the minimum exchange rate for the Swiss franc against the euro is no longer justified.”
Economists believe that the weaker euro brings a mixed blessing for the struggling eurozone economy since European exporters will benefit from a competitive advantage against foreign rivals because their products will be cheaper for customers that pay in dollars or currencies tracking with the dollar.
A weaker euro, however, would also have negative effects in the eurozone. Since crude oil is commonly traded in dollars, a weak euro cancels out some of the economic advantages from the recent plunge in oil prices.
Oil prices have plunged about 50 percent since June last year over increased supplies by certain countries, such as Saudi Arabia, and a lackluster global economic growth.
Europe plunged into financial crisis in early 2008. The threat of insolvency has plagued heavily debt-ridden countries such as Greece, Portugal, Italy, Ireland, and Spain.
The debt crisis has forced EU governments to adopt harsh austerity measures and tough economic reforms, which have triggered incidents of social unrest and massive protests in many European countries