Fears of an economic recession in Europe: the euro traded around $1.03 | AlMomento.Net

MADRID – The euro fell this Tuesday to nearly $1.03, its lowest since November 2002, and European stock markets sank as recession fears grew after weak data from the eurozone economy was published and investors turned to the dollar.

The euro was trading at $1.0251, down from $1.0433 in late European forex trading the previous day.

The currency also slid as investors watched big rate hikes by the US Federal Reserve in its fight against inflation, unlike the European Central Bank, which is planning more modest increases.

The pound also fell to a two-year low below $1.21.

Stock indices in Frankfurt, London and Paris fell about 3 percent in trading amid growing fears of a prolonged economic downturn across Europe.

The Milan Stock Exchange closed lower today, and its selective index FTSE MIB fell by 2.99%, to stand at 20,705.06 points, due to investors’ fear of a recession, when the euro hits its lowest levels and the industry sector is affected by it.

For its part, the FTSE Italy All-Share All-Share Index fell 2.91% to 22,681.71 integers.

Wall Street was in tune with Europe, with the Dow Jones down 1.86 percent as US investors returned from a three-day weekend.

A major survey showed on Tuesday that economic growth in the euro zone faltered in June, dragged down by rising consumer prices.

The monthly S&P Global Purchasing Managers’ Index (PMI), which measures business confidence, fell to 52.0 in June from 54.8 in May.

However, the index, which hit a 16-month low, is still above the 50-point level, indicating expansion.

According to S&P Global, “the manufacturing sector is already shrinking for the first time in two years, and the services sector has suffered a marked loss of growth momentum amid the cost-of-living crisis.”

“Rising fears of recession are taking the euro down, while the dollar is rising on bets that the Federal Reserve will continue to aggressively raise interest rates to control inflation,” City Index analyst Fiona Cincotta told AFP.

“Today’s PMI data from Europe highlighted the risks of a slowdown in growth at the end of the second quarter and raised the possibility of a contraction in activity in the coming months.”

European Central Bank Vice President Luis de Guindos expects eurozone interest rates to rise in July by a quarter point.

Other board members also considered that a quarter point rise was appropriate so that the markets would rule out a rise in the price of low money.

By contrast, most Asian stock markets closed higher amid growing speculation that US President Joe Biden is about to remove some Trump-era tariffs on Chinese goods.

However, the mood on the stock exchanges has become increasingly bleak in recent months, as observers warn that sharp interest rate hikes aimed at curbing price hikes could lead to deflation, exacerbating the uncertainty caused by Russia’s war in Russia. Ukraine.

The two major crude oil contracts fell more than 5 percent on Tuesday amid growing fears of a recession in oil-consuming countries.

At 1340 GMT, a barrel of Brent oil, the main international contract, fell 5.6 percent to $106.93, while the major US contract, West Texas Intermediate, fell 5.1 percent to $102.91.

Investors were also aware of the new Covid outbreak in China which has led to city closures.

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