The euro reaches parity with the dollar for the first time in two decades | Finance | Economie

euro Accessed briefly, this Tuesday, July 12, 2022, Parity with the US dollar For the first time in two decades, it is saddled with the threat to cut off Russian gas supplies in the European Union.

(See: Options for trying to control historical prices for the dollar.)

Investors favored the US currency, which is up nearly 14% since the start of the year and has been trading briefly against the dollar against the euro, its highest level since December 2002.

single european currency It settled against the dollar, at $ 1.0050, 0.10% higher. But the euro’s respite may be short-lived.

(See: Will we have $2,500 or 3,000 pesos again?).

Many analysts expect the euro to fall below $1, something we haven’t seen since December 2002.

The market fears that the energy crisis in Europe will worsen due to the interruption of supplies of Russian gas that arrives via Nord Stream 1 pipeline, Currently under maintenance.

(See: Is it possible for the dollar to reach 5,000? Here’s what the experts say.)

This situation is fueling fears there recession in Europe.

gas from Russia inThe center of the storm in Europe“And the announcement that Canada will return the turbines to Germany to alleviate the energy crisis with Russia.”It didn’t have a positive effectOanda analyst Jeffrey Haley said:

Russian giant Gazprom On Monday, July 11, maintenance work for the Nord Stream 1 gas pipeline, which transports gas directly from Russia to Germany, began.

European countries are waiting to see if Moscow will restore supplies after the 10-day scheduled works.

(See: Don’t Buy Dollars, Petro Recommendation for Colombians.)

The main issue is whether gas will return after July 21. Looks like the market has already made up its mindHalley pointed out.

For Mark Heffel, expert at UBS, A Suspension of Russian gas supplies in EuropeIt would cause a recession in the entire Eurozone with three consecutive quarters of economic contraction“.

European Central Bank (ECB), After that, it may find itself facing difficulties if it wants to end its expansionary monetary policy and move to a deflationary phase to fight the hyperinflation that is exacerbating the situation.

(See: Latin American countries with the worst devaluations against the dollar in 2022.)

On the other hand, the dollar Federal Reserve (FED), He has more wiggle room to continue raising interest rates as the recently released jobs numbers prove that the US economy is more resilient at the moment.

The dollar recorded historical prices.

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Inflation data in Germany, France and the United States It can worry investors.

If US inflation is stronger than the market expects, it could benefit the dollar“As investors are betting that the Fed will have to raise interest rates faster,” said Fouad Razakzadeh, analyst at Forex.com.

The dollar also shone against other currencies that are considered vulnerable. Sterling pound It fell to $1.1807, a level not seen since March 2020, when the outbreak of the novel coronavirus epidemic in Europe, in the midst of Brexit negotiations, sent the British currency to its lowest level since 1985.

France Press agency

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