The euro loses ground just as oil and bond yields begin to rise again. In the first trading on September 29, the single currency moved around 1.1367 dollars, at the lowest levels in the last three months. The dollar, however, is close to two-month highs and Brent remains in the area of 106 dollars a barrel.
The movement may seem distant from everyday life, but the exchange rate indicates how many dollars you can get for one euro. When the value drops, purchases made in American currency become more expensive. The effect affects imported oil, travel to the United States and online purchases, but also investments in international stocks and ETFs.
Not everyone, however, loses out. A weaker euro can benefit European companies selling to the United States and increase, at least temporarily, the euro value of a dollar investment. To understand who gains and who loses, we need to distinguish between asset price and currency risk.
Because the euro is falling against the dollar
The reference exchange rate published by the European Central Bank on September 28 was 1.1378 dollars per euro. In the following hours the price dropped to around 1.1367.
What strengthens the dollar is, above all, the return of US yields to levels not seen since 2007. The ten-year Treasury exceeded 5.27%, while the two-year Treasury approached 5%. The market therefore considers it possible that the Federal Reserve will keep rates high and proceed with new increases to counter inflationary pressures.
Higher rates and yields can attract capital to the United States, increasing demand for dollars. On the other side of the Atlantic, the ECB appears more cautious: the gap in expectations on the two central banks penalizes the euro.
Added to this is oil. Crude oil above 100 dollars reignites the risk of inflation, but Europe is a net importer of energy and is more affected by an increase in costs. The result is an uncomfortable combination: expensive energy and a less favorable currency with which to purchase it.
How much does the exchange rate affect the price of oil
According to Eurostat, in 2025, 86.7% of European imports of petroleum products were invoiced in dollars. This is why the price of crude oil is not enough to explain how much Europe actually pays.
Assuming a barrel stopped at 106 dollars, its cost in euros changes like this:
| Euro-dollar exchange rate | Cost of a barrel from 106 dollars |
| 1 euro = 1.20 dollars | 88.33 euros |
| 1 euro = 1.16 dollars | 91.38 euros |
| 1 euro = 1.1367 dollars | 93.25 euros |
Compared to an exchange rate of 1.20, the same barrel costs almost 5 euros more, even without any increase in the dollar price. It is the mechanism through which currency depreciation can amplify an energy shock.
This does not mean that petrol and diesel will immediately increase in the same proportion. As shown by QuiFinanza’s in-depth analysis of how the price of fuel is formed, the prices of refined products, transport costs, distribution, margins, VAT and excise duties also have an impact at the pump.
The exchange rate therefore represents additional pressure, not an automatic prediction of the final price.
Travel and dollar purchases become more expensive
The effect is most direct for those who must pay for hotels, domestic flights, restaurants or products in the United States. For the same price in dollars, more euros are needed.
| Spending in the United States | With exchange rate at 1.20 | With exchange rate at 1.16 | With exchange rate at 1.1367 |
| $1,000 | 833 euros | 862 euros | 880 euros |
| $3,000 | 2,500 euros | 2,586 euros | 2,639 euros |
An expense of 3,000 dollars costs around 139 euros more than if the exchange rate is 1.20. The simulation does not include bank commissions, card surcharges and conversion costs, which can further widen the difference.
The rule of thumb is to check which exchange rate the bank applies and, when a terminal offers to pay in euros instead of the local currency, carefully compare the conditions. The automatic conversion offered by the merchant may include an inconvenient margin.
What happens to ETFs and dollar investments
For an Italian saver, a stronger dollar can, however, represent an advantage. If a US asset keeps its dollar price unchanged, its value converted into euros increases.
Those who own American shares or an ETF that replicates an international index can therefore obtain two distinct results:
- the change in the index or securities purchased
- the change in the exchange rate between the euro and the dollar.
An ETF listed on Piazza Affari in euro is not necessarily protected from currency fluctuations. The currency of the assets present in the fund counts, not just the one used to purchase the shares.
Which companies can profit and which ones risk
A weaker euro tends to benefit European companies that sell in dollars but incur most of their costs in euros. By converting American revenues, they can record a larger amount on their balance sheets.
The advantage is not the same for everyone. Many groups produce directly in the United States, purchase components in dollars or use hedging strategies to limit exchange rate fluctuations. Hedging makes outcomes more predictable, but also delays the positive or negative effects of currency movement.
However, companies that import energy, raw materials or components paid in dollars and sell mainly on the European market are more exposed. If they fail to pass on the increased costs to prices, the risk is a reduction in margins.
What can happen now
The exchange rate will depend above all on American data on employment and inflation, on the decisions of the Federal Reserve and on the trend of oil. Still robust economic numbers would strengthen the case for further rate hikes in the United States, offering further support to the dollar. A sharper slowdown could, however, reduce pressure on the euro.
For families and investors, the level of 1.1367 is the signal that the exchange rate has once again influenced economic decisions.
