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Euro/US dollar trades at a fresh 20-year low.

On Monday, the Euro fell to a new 20-year low versus the US dollar as a result of the US Federal Reserve’s tightening of monetary policy and Russia’s military campaign in Ukraine, which puts Europe’s energy supply in jeopardy.

According to official data, the euro/dollar exchange rate dropped to $1.0053 at 9.49 a.m. EDT (13.49 GMT), its lowest level since Dec. 6, 2002.

The dollar index, which compares the US dollar’s value to a basket of six other currencies including the British pound, euro, Swiss franc, Japanese yen, Canadian dollar, and Swedish krona, increased 1.1 percent to 108.19, setting a new record high for the index that stretches back 20 years.

Since March, the Fed has raised interest rates by a total of 150 basis points to combat record-high inflation, which has boosted the dollar index.

On the other hand, the European Central Bank (ECB) has not yet adjusted interest rates.

On July 21, the ECB is projected to raise interest rates by 25 basis points, and on July 27, the Fed is likely to increase rates aggressively by an additional 75 basis points.

The risk from the conflict in Ukraine remains, and Germany, the largest economy in the eurozone, may experience a permanent halt in the delivery of Russian natural gas.

Recession worries plague the economies of both the United States and Europe.

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