EUR/USD falls to 20-year low, hits $1.028 per unit — Analysts say parity is looming – Bitcoin News

The euro had a subdued start to the second half of 2022 as fiat currencies fell to a 20-year low against the dollar. The decline has fueled fears of a global recession, with analysts arguing that “parity is only a matter of time now.”

EUR and USD close to parity

Policymakers at the European Central Bank (ECB) have been dealing with record levels of inflation but have been much slower than the U.S. in raising benchmark interest rates. ECB members meet ECB President Christine Lagarde at the ECB Annual Forum, 27-29 June Say: “Monetary policy is having a tough time.”

At the forum meeting, Lagarde further mentioned that the European Union (EU) will raise interest rates for the first time this year by 25 percentage points in July. She also pointed out that a rate hike is likely to take place in September, but it will be larger than the rate hike in July. According to Frederik Ducrozet, head of macroeconomic research at Pictet Wealth Management, ECB members may want them to raise bank rates soon.

“In hindsight, I think many members of the management board would have liked to raise rates in June,” Ducrozee explained. “But it’s a very difficult situation because you know we’re heading for a slowdown,” the Pictet executive added.

EUR/USD falls to 20-year low, hits $1.028 per unit - analysts say parity looms

Inflation and problems related to the war in Ukraine have left the EU financially struggling with fewer options to choose from. A dull European economy has also put a lot of pressure on the euro, the region’s sovereign legal tender and affected in 19 economies. The euro hit a 20-year low on July 5, 2022, at $1.0281 per euro, its lowest value against the dollar since December 2002.

Mizuho Forex Analyst Neil Jones Tell Bloomberg said on Tuesday that parity with the U.S. dollar is “just a matter of time now.” Bloomberg’s options price model suggests a 60% chance of EUR/USD. Dominic Bunning, head of European FX research at HSBC, told Bloomberg that “it’s hard to find positive comments on the euro.” The analyst added:

Yields rise as the ECB insists that we will only see a 25bps rate hike in July – when other central banks are raising rates much faster – and waits for a quicker tightening in September The rise also had little support.

GBP/USD hits two-year low, more euro volatility expected

In addition to the ECB’s handling of inflation and war-related issues, Britain is also suffering.Bank of England in a detailed Report Saying that the outlook for the UK economy appears bleak, the central bank said UK households are expected to face payment difficulties. Sterling (GBP), the oldest fiat currency in the world, faces the same problems as the euro in mid-June Drop below $1.20 against the US dollar.

GBP/USD has not fallen this low in two years since March 2020. Analysts expect the euro to be more volatile between fiat currencies like the U.S. dollar and Swiss franc. “The foreign exchange market has not fully recovered liquidity given the U.S. holiday,” Mizuho’s foreign exchange analysts concluded on Tuesday. “Any given deal size is likely to have a bigger impact on market movements.”

tags in this story

19 economies, Christine Lagarde, Dollar, Dominic Bunning, ECB, ECB inflation, economy, EU, EUR, EUR, European economy, European Union, Frederick Ducroze, GBP, inflation, Mizuho Forex Analyst, Neil Jones, GBP, Swiss Franc, Dollar, U.K., UK economy, Dollar

What do you think of the near parity between the euro and the dollar? Do you think it will reach parity in the near future? Let us know what you think about this topic in the comments section below.

Jamie Redman

Jamie Redman is Head of News at News and a fintech reporter based in Florida. Redman has been an active member of the cryptocurrency community since 2011. He is passionate about Bitcoin, open source code and decentralized applications. Since September 2015, Redman has written over 5,700 articles for News on the disruptive protocols emerging today.

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