Euro approaches parity with the dollar for first time in 20 years

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13th July 2022

Bite-sized business news from the UK and beyond

Good morning As we all try to keep cool in the sweltering heat, a friendly reminder the jumping off Tower Bridge into the Thames is not the way to go.

Today's stories

Euro approaches parity with the dollar for first time in 20 years
Leaked Uber documents reveal shady business

EUROPE
Euro approaches parity with the dollar for first time in 20 years

What happened?
Yesterday the euro fell to a 20 year low against the US dollar and came close to $1.00 or parity.

How did we get here?
The euro was launched in 1999 as a single currency for European countries with the aim of boosting trade and economic growth between those nations by removing currency risk. Today there are 19 countries in the eurozone area including France, Germany and Italy.

Since its creation the euro has traded as high as $1.60 back in 2008. But in 2022, after peaking at $1.16 in February, it’s dropped 12%, the downward spiral is driven by:

Energy concerns – the fallout from the war in Ukraine has highlighted how dependent Europe is on Russian energy supplies. There are growing fears that reducing the reliance on Russia will mean Europe faces an energy crisis this winter that could hamper economic output and tip the region into a recession.
Federal Reserve policy – The US central bank has signalled that it will hike interest rates to control soaring consumer prices in the country. In comparison the European Central Bank has been slower to signpost any changes to its monetary policy. This has increased demand for dollars and thereby its strength against the euro.

Why does it matter?
A weaker euro is good news for American tourists visiting the eurozone this summer as it increases their spending power. On the flip side Europeans travelling to the US will feel more out of pocket.

However US businesses could find their exports are less competitive on the international market given the strength in the dollar.

The dollar is also strengthening against the pound. Sterling is now trading at around $1.185, the lowest since March 2020, weighed down by political uncertainty and a gloomy outlook over the UK economy.

Other stories to keep you in the loop

Race to replace prime minister turns ugly
Retail sales fall at fastest rate since lockdown
Google slows hiring amid economic uncertainty
Boohoo introduces return charges
Peloton to halt in-house production of exercise bikes in latest U-turn
Lego to end all operations in Russia
Spotify buys 'Wordle' rival

TECH
Leaked Uber documents reveal shady business

What happened?
This week a leaked trove of documents revealed Uber’s secretive lobbying tactics, including undisclosed meetings with top government officials in the UK, US and France, illuminating a murky area in which the worlds of big tech and policy-making meet.

How did we get here?
An ex-Uber executive leaked over 124,000 emails, texts and messages that reveal questionable behaviour among management as the ridesharing giant expanded.

The files date back to 2013-17 when co-founder Travis Kalanick ran the company and include interactions with governments in over 40 countries. Here are some of the big takeaways:

In the UK, the company labelled Boris Johnson as the ‘ultimate target’ during his time as Mayor of London. Uber saw the capital as a key market but faced backlash from black cab drivers over its expansion. Uber also met other top MPs like former health secretary Matt Hancock, former chancellor Sajid Javid and home secretary Priti Patel. Critics argue that these meetings should have been declared and expose loopholes in the rules set out for ministers call the ministerial code.
In France, back when current president Emmanuel Macron was economy minister, he allegedly bent over backward to help Uber grow in Paris by arranging a secret deal with ministers who opposed its expansion.
In 2015, 80 Uber drivers were reportedly attacked in clashes with taxi drivers across Europe. But the docs show the company saw that violence as something to leverage to get public support and legislative wins.

What did Uber say?
The company admitted to “mistakes and missteps” in the past, but said it’s transformed into a “different” company since Kalanick resigned in 2017. Kalanick says he never authorised actions that would “obstruct justice” and that he never suggested taking “advantage of violence at the expense of driver safety.”

Stat of the day

A new survey found that over 4m UK households are cutting back on showers and buying lower-quality food to try to make ends meet

Interesting links from around the web

Finally, what the universe looks like
Everything you need to become happier, according to science
The best Amazon Prime Day deals

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Euro approaches parity with the dollar for first time in 20 years

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