The euro recovered today parity against the dollar, up to its maximum for three weeks, after the aggressive stance transmitted on Thursday by the European Central Bank (ECB) to the markets.
The euro it changed around 15:00 GMT to 1.0052 Dollarscompared to 0.9962 Dollars in the closing hours of European forex market trading the previous day.
The ECB fixed the reference change of the euro in 1.0049 Dollars.
“The ECB yesterday raised interest rates by 75 basis points, in a meeting of great importance, transmitting to the markets an unequivocally aggressive stance that led to another rise of 75 basis points in the October meeting”, consider Monex analysts Europe.
This did not necessarily help euro immediately, as the single currency initially fell, but the effect of higher implied interest rates and short-term yields is seen today, with the euro trading again above the paritythey add.
The markets discount that the Federal Reserve (Fed) will raise its interest rates by 75 basis points this month, so the appreciation of the dollar will not receive more momentum.
The markets will pay attention to the decision of the countries of the European Union (EU) to intervene temporarily in an emergency in the electricity market to reduce energy costs for consumers and companies.
The main proposals on the table include: a limit on Russian gas, a cap of 200 euros/MWh (megawatt hours) on the price of electricity not generated with gas, reaching an agreement with the Member States to reduce the demand for energy by 10% per month and a tax on electricity producers, according to Monex Europe.
The energy crisis could lead Europe into recession and this puts downward pressure on the euro.
The single currency was traded in a fluctuation band between 1.0008 and 1.0111 Dollars.
