Reuters and Investments write about it.
After the euro reached parity with the dollar around 12:00 Kyiv time, the euro rebounded again and by 2:00 pm it was already 1.0026 per dollar.
It should be noted that stock markets also declined, with investors worried about the prospects for further policy tightening by the European Central Bank and concerns about the state of the economy around the world.
Thus, the dollar’s role as a “haven currency” for investors has strengthened in recent weeks. As a result, the US currency rose to a twenty-year high against many other currencies.
The dollar index rose 0.3, while the pound hit another two-year low and the yen approached its weakest level in more than two decades.
Why has the euro become cheaper?
The euro has become a particularly weak currency, given the impact of the sharp rise in natural gas prices on the regional economy and the war in Ukraine. So is the fact that the European Central Bank is lagging behind its rivals in raising interest rates.
Reuters writes that the mood of eurozone business people is also deteriorating due to fears of a recession. Also among the investors’ concerns is the fact that a number of Chinese cities, including the commercial hub of Shanghai, are imposing new COVID-19 restrictions starting this week to curb the new outbreak.
The rapid rise in the cost of energy in Europe also raises serious concerns, as the largest pipeline carrying Russian natural gas to Germany has been closed, allegedly for repair.