Oil, gasoline, diesel, and gas prices have all been impacted by the war in Iran since the end of February. The German economy, already struggling due to less-than-ideal economic expectations, is also being strained by rising consumer prices and energy-intensive sectors such as steel and chemicals.
The euro, which is currently worth about $1.16, is currently suffering as well. If the Iran war lasts much longer than the “four weeks” declared by the US president, the euro could be hammered severely. A persistent regional escalation in the Middle East with significant energy interruptions impacting Europe would be a worst-case scenario for the euro.
Investors are more likely to sell their shares and retreat to “safe havens” like the US dollar during times of crisis. The euro depreciates and the dollar gains value when more dollar-tied stocks are purchased.
“If the blockade at Hormuz lasts longer, i.e., several weeks, the oil price could also rise to $100 per barrel [or] more,” Brzeski told Euronews. In that case, the euro would continue to decline while the dollar would gain first. Most likely to be about $1.10 per euro.
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