Euro slides to a 20-year low against the dollar as recession worries build

Euro slides to a 20 year low against the dollar as recession worries build

July 6, 2022: -On Tuesday, the euro dropped to its softest level in two decades, sliding more than 1% for the session to get $1.0283.

It comes as the fear of a recession in the eurozone ramp up, gas prices soar, and the Ukraine war shows zero signs of abating.

Eurozone inflation reached a record 8.6% in the previous month, which prompted the European Central Bank to give markets advance notice of the intention to hike interest rates for the initial time in 11 years at its July meeting.

However, increasing fears of a slump may limit the central bank’s capacity to tighten its economic approach. On Monday, the July Sentix Economic Index showed investor confidence across the 19-country eurozone has plunged to its numerous down information from May 2020, which points toward an “inevitable” recession.

Over recent months, the record-high inflation in Europe has been abetted by soaring gas prices.

On Monday, natural gas costs in Europe extended their relentless rise, climbing to highs not seen since before March. About the front-month gas price at the Dutch TTF corner, a European benchmark for natural gas trading was trading up 7.8% to get 175.5 euros per megawatt-hour. Planning strikes in Norway estimated to market woes about Russian supply cuts.

All of these factors have combined to reach the euro hard. The eurozone’s currency has produced approximately 9% of its value against the dollar since the start of the year.

The dollar’s strength persists as risk-averse investors seek a haven and the U.S. Federal Reserve embarks on what examines to be an aggressive rate-increasing control.

In June, after growing desired good paces by three-quarters of a percentage point, Fed Chair Reserve Chair Jerome Powell processed that the major bank could increase good rates by a similar magnitude next month.

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Euro slides to a 20-year low against the dollar as recession worries build
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Euro slides to a 20-year low against the dollar as recession worries build
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On Tuesday, the euro dropped to its softest level in two decades, sliding more than 1% for the session to get $1.0283.
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The Women Leaders
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