The euro hit a 20-year low against the dollar as investors began to scale back expectations for interest rate hikes by the ECB, given the risk of a recession in the region.
The single currency fell 0.9% to 1.0333 against the dollar, its lowest level since December 2002.
Markets cut their expectations for ECB policy tightening to less than 140 basis points this year, following the downward revision of France’s PMI.
Three weeks ago estimates were for 190 basis points, thus widening the interest rate gap with the US central bank.
The euro has fallen more than 8% against the dollar this year as record inflation has escalated pressures on households and businesses and, along with fallout from the war in Ukraine, has hurt the ECB’s ability to raise interest rates by the same speed as the Fed.
Losses today were compounded by low liquidity and selling in the euro-Swiss franc exchange rate, Bloomberg sources said.
Source: Capital
I am Sophia william, author of World Stock Market. I have a degree in journalism from the University of Missouri and I have worked as a reporter for several news websites. I have a passion for writing and informing people about the latest news and events happening in the world. I strive to be accurate and unbiased in my reporting, and I hope to provide readers with valuable information that they can use to make informed decisions.
