The euro sinks to the lowest level against the dollar in 20 years

Published
07/05/2022 13:20

Updated
07/05/2022 13:20

The euro depreciated this Tuesday to 1.03 dollarsits minimum value since November 2002because fears of recession increased after the publication of weak data on the eurozone economy and investors took refuge in the greenback.

The euro was exchanged around 09.50 GMT at $1.0302, compared to $1.0433 in the last few hours of the previous day’s European forex market trading. Economic growth in the euro zone slows to its sixteen-month low in Juneaccording to S&P Global (formerly IHS Markit).

Its final composite index of the total activity of the euro area, of the manufacturing and service sectorstood at 52 points (54.8 points in May), registering its minimum of sixteen months.

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

The euro traded in a tight trading band on Monday around $1.0450 on a lack of US momentum as the markets remained closed for the celebration of Independence Day.

Members of the Governing Council considered that a rise of a quarter of a point is appropriate, so the markets discount a rise in the price of low money.

Vice President of European Central Bank (ECB), Luis deGuindos, forecasts a rise in interest rates in the euro zone in July of a quarter of a point.

Rise in interest rates in the euro zone

Other members of the Governing Council also considered that a quarter point rise is appropriate so the markets discount a rise in the price of low money. The euro was paid between 1.0299 and 1.0448 dollars until noon.