by Emmanuel Vanbrussels
published on Monday 05 September 2022 to 08:51 •
2 minus read
On Monday morning, the euro fell below the $0.99 mark for the first time in nearly twenty years.
The euro traded at 0.9899 dollar, compared to 0.9947 dollar last Friday. This means that the European single currency falls significantly below the parity (1 euro is 1 dollar), which had to be released in July.
The further development will depend on the impending interest rate hike by the European Central Bank. It remains to be seen whether the ECB will raise interest rates by 50 basis points later this week, or will put more effort on the brakes and opt for a 75 basis point hike.
In the latter scenario, the euro should strengthen again and rise above parity.
The euro has already weakened by more than 16 percent compared to a year ago, as large investors are betting on a depreciation. The weak euro also contributes to inflation: the weaker the single currency, the more expensive the import of dollar-denominated energy products.
Source: ABM Financial News