Who should care about the euro? You

If you're wondering who should care about the decline of the euro, the answer is easy: you.

The pan-European currency used by 19 countries has swooned 22.6% to $1.078 from its 12-month high of $1.393. Why should you care about whether the euro is high, low or somewhere in between?

•A falling euro makes it harder for U.S. companies to sell their goods abroad. Suppose you made left-handed monkey wrenches for $100. At the euro's high, that would translate into 71.8 euros. At $1.07 per euro, the same wrench would cost 93.5 euros – a 30% increase.

•A falling euro saps the returns from overseas markets. The German stock market has gained 21.2% in euro terms this year, according to MSCI, which tracks overseas markets. For a U.S. investor, who must convert gains into dollars, the German market has returned 6.4%.

•The euro's drop hurts U.S. companies that do business abroad. A report by currency risk management consulting firm FiREapps says U.S. companies lost $18.66 billion in the fourth quarter because of currency conversion.

There are some happy consequences from the stronger dollar, too. Travel to Europe is less expensive. A baguette that cost 5 euros when the currency was worth $1.34 set you back $6.95. Now you can break the same bread for the U.S. equivalent of $5.35.

Unfortunately for the U.S. tourism industry, the USA is more expensive for vacationing Europeans. Foreign travel spending slowed in January as the dollar rose, according to data from the Commerce Department.

Why has the dollar risen so much? Money flows to where interest rates are highest, all other things being equal. Even though the key Fed funds rate is near zero, lending rates across much of Europe are negative: Depositors actually pay banks to hold their money.

In the USA, the key 10-year Treasury note yield closed at 1.98% Thursday. Though that seems like chicken feed, it's a feast to European investors. Britain's 10-year government note yields 1.54%, Italy's yields 1.18%, and Germany's yields 0.15%.

The strong dollar may be one reason the Federal Reserve has hesitated to raise interest rates this year. Doing so could push the dollar higher, which would hurt U.S. manufacturing even more. "The Fed has come to realize that, whether they like it or not, they are the central bankers to the world," says John Lonski, team managing director of the economics group at Moody's Analytics.