Frankfurt.- The increasingly weak euro reached parity with the dollar today due to investors’ fear of an economic recession and the energy crisis.
The exchange rate of the euro and the dollar has today reached parity for the first time in twenty years, since July 15, 2002, the last date on which the price of the common currency exceeded that of the “green ticket”according to market data.
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According to Bloomberg data consulted by Efe, the euro has reached parity with the dollar at 11:46 local time (9:46 GMT), depreciating 0.4% compared to yesterday’s close and 12.05% so far year (ended 2021 at $1,137).
Experts consider that the recent rises in interest rates of the US Federal Reserve (Fed) have strengthened the dollar and encouraged investors to take refuge in this currency, while the risk of recession and energy concerns fueled by the war in Ukraine weigh more and more on the eurozone.
The yen also continues to weaken against the dollar and is changed to 137 unitsa level not seen since September 1998, as the Japanese central bank’s monetary policies distance themselves from the Fed or the European Central Bank (ECB).
The euro reached parity after it was published that business confidence plummeted in July in Germany on concerns about energy supplies.
The possibility that China apply new lockdowns after increase in covid-19 infections It could weigh down the economy of the country and the global economy.
In addition, investors anticipate a recession in the euro zone due to the energy crisis and the probability that Germany will enter negative growth due to its greater dependence on Russian gas.
As the European economy weakens, the Fed has been able to raise its interest rates aggressively and thus has strengthened the dollar because the US offers higher interest rates.
