The dollar rises as fears of a global recession escalate | AlMomento.Net

The US currency outperformed other global currencies and rose more than 1% on growing fears of a global recession and speculation that it could enter a parity with the euro.

Fear of recession is causing large European stock markets to plunge with losses of more than 3%, in line with Wall Street’s negative opening, which caused oil prices to drop by 10% and the euro’s value against the dollar, to its lowest since 2002.

The main index of the Spanish trading floor IBEX 35 fell 2.48%, the largest decline since June 12, and settled at 7959.4 points, its lowest level since the beginning of last March, which puts annual losses at 8.66%.

But in the old continent, other stock markets showed a decline like 2.99% in Milan; 2.91% in Frankfurt; 2.86% in London and 2.68% in Paris, while the Euro Stoxx 50 Index, which includes the largest listed companies in Europe, fell 2.68%.

In times of crisis, people often turn to the world’s largest reserve currency. Bloomberg reported that the dollar index rose more than 5.7% in the April-June period, its best quarter since 2016.

The euro has fallen to its lowest level since 2002

The euro, which has been falling for months due to rising interest rates in the world, fell to $1.23, its lowest level since December 2002 and very close to parity with the dollar.

The single currency began to decline after the publication of the June PMI for the major countries in the Eurozone, which recorded growth, but at the lowest rate in the past 16 months in France; From the last half of the year in Germany, and from the last 5 and 3 months in Italy and Spain.

According to S&P Global, the consultancy that compiles the index, June was “affected by the first contraction in industrial production in two years and by a slower pace of growth in business activity in the services sector.”

Inflation and rise in interest rates

Inflation, which has been further pressured by the war in Ukraine and sanctions against Russia, and central bank hikes in interest rates, is hampering the economy and many investors fear this strategy could eventually lead to a recession.

Low expectations of global oil demand caused Brent crude, the reference in Europe, to decline by up to 10% at the closing of stock markets in Europe, and settled at $ 102 a barrel, a price not seen since last May 11.

The TTF natural gas fund ended the session down 0.5%, although shortly before noon it had reached 175 euros per megawatt-hour, a maximum in four months, due to fears of reduced supplies from Russia as a result of the Ukraine war. .

(with EFE and FRANCE 24)

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