Euro sinks to 20-year low after Fed hike

Euro sinks to 20-year low after Fed hike

The euro today sank to $0.98, a twenty-year low, after the US Federal Reserve (Fed) raised interest rates and announced more very rapid increases.

The euro It was trading at $0.9819 as of 3:00 p.m. GMT, versus $0.9891 in late European forex trading the previous day.

The European Central Bank (ECB) fixed the reference change of the euro at $0.9884.

The Fed raised its interest rates by 75 basis points, to between 3% and 3.25%, a decision that the markets had already discounted, but the forecasts of its members for rates are very restrictive, of another 125 basis points until the end of the year and a rise of another 25 basis points in 2023, to place them at 4.6% (3.8% in the June projections).

“After maintaining levels around parity for the last month, the euro finally sank under the weight of the rise in US rates,” comment analysts at Monex Europe.

In addition, tensions with Russia over the war in Ukraine lead investors to avoid risk and buy dollars, considered a safe currency in times of crisis.

Jobless claims rose last week in the US to 213,000 (208,000 claims the week before).

The single currency was traded in a trading band between $0.9810 and $0.9900.

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