The euro continues its descent, nothing stops the dollar - Finance

The euro continues its descent, nothing stops the dollar – Finance

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The euro continued to slide against the dollar on Wednesday, hitting a new two-decade low on concerns about the Old Continent’s economy.

Around 09:15 GMT (11:15 a.m. in Brussels), the euro lost 0.38% to 1.0228 dollars, after falling to 1.0227 dollars, its lowest since December 2002.

The euro fell “under the combined effect of fears of recession in Europe and financial turbulence fueled by a new surge in energy prices in the region (especially gas and electricity prices)”, explains Guillaume Dejean, analyst at Western Union. “There are good reasons to think that Russia will continue to reduce its gas exports to Europe”which raises the risk of a gas crisis and makes the euro unattractive, comments Ulrich Leuchtmann, analyst at Commerzbank.

If fears of a recession occupy the minds of investors worldwide, the United States could solve its problems by easing its monetary policy while the Europeans would struggle to compensate for their lack of gas, continues the analyst.

Otherwise, “the credibility of the European Central Bank (ECB) has been eroded” by its “overreaction” to an increase in the spread in the borrowing rates of member countries of the euro zone, estimates Kit Juckes, analyst at Societe Generale, who therefore judges the euro “impossible to buy” this summer. The currency “is so unattractive that even a major political crisis does not allow the euro to rise against the pound!”he points out.

The pound indeed took 0.27% to 85.70 pence for one euro, as uncertainties mount over the future of British Prime Minister Boris Johnson after the dramatic resignations of two of his ministers. Weakened but determined to stay, Boris Johnson will defend his post at noon (11 a.m. Brussels time) in Parliament during the weekly session of questions to the Prime Minister, which promises to be electric.

Around 9:15 a.m. GMT (11:15 a.m. in Brussels), the euro lost 0.38% to 1.0228 dollars, after having fallen to 1.0227 dollars, its lowest since December 2002. cumulative effect of fears of recession in Europe and financial turmoil fueled by a new spike in energy prices in the region (notably gas and electricity prices)”, explains Guillaume Dejean, analyst at Western Union. “There are good reasons to think that Russia will continue to reduce its gas exports to Europe”, which raises the risk of a gas crisis and makes the euro unattractive, comments Ulrich Leuchtmann, analyst at Commerzbank. If fears of a recession occupy the minds of investors around the world, the United States could solve their problems by easing their monetary policy while the Europeans would struggle to compensate for their lack of gas, continues the analyst. In addition, “the credibility of the European Central Bank (ECB) has been eroded” by its “overreaction” to an increase in the spread in the borrowing rates of member countries of the euro zone, estimates Kit Juckes, analyst at Societe Generale, which therefore considers the euro “impossible to buy” this summer. The currency “is so unattractive that even a major political crisis does not allow the euro to rise against the pound!”, He underlines. The pound indeed took 0.27% to 85.70 pence for one euro, as uncertainties mount over the future of British Prime Minister Boris Johnson after the spectacular resignations of two of his ministers. Weakened but determined to stay, Boris Johnson will defend his post at noon (11 a.m. Brussels time) in Parliament during the weekly session of questions to the Prime Minister, which promises to be electric.

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