{"id":13161,"date":"2022-07-05T18:18:08","date_gmt":"2022-07-05T18:18:08","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/euro-drops-to-20-year-low-against-the-us-dollar-tapping-1-028-per-unit-analyst-says-parity-is-imminent-economics-bitcoin-news\/"},"modified":"2022-07-05T18:18:08","modified_gmt":"2022-07-05T18:18:08","slug":"euro-drops-to-20-year-low-against-the-us-dollar-tapping-1-028-per-unit-analyst-says-parity-is-imminent-economics-bitcoin-news","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/euro-drops-to-20-year-low-against-the-us-dollar-tapping-1-028-per-unit-analyst-says-parity-is-imminent-economics-bitcoin-news\/","title":{"rendered":"Euro Drops to 20-Year Low Against the US Dollar, Tapping $1.028 per Unit \u2014 Analyst Says Parity Is Imminent \u2013 Economics Bitcoin News"},"content":{"rendered":"

(Originally posted on : Bitcoin News )<\/b>
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The euro has had a sluggish start to the second half of 2022 as the fiat currency slid to a 20-year low against the U.S. dollar. The drop adds to the fear that the global economy is in a recession and analysts believe that the risk of \u201cparity is just a matter of time now.\u201d<\/strong><\/p>\n

Euro Nears Parity With US Dollar<\/h2>\n

Policymakers at the European Central Bank (ECB) have been dealing with record inflation levels but have been much slower than the U.S. in terms of raising the benchmark interest rate. On June 27-29, members of the ECB met at the European Central Bank\u2019s annual forum and ECB president Christine Lagarde said<\/a>: \u201cMonetary policy is at a difficult juncture.\u201d<\/p>\n

During the forum meeting, Lagarde further mentioned that the European Union\u2019s (EU) first rate hike this year would happen in July, with a quarter-point percentage increase. She also noted that a rate hike would likely take place in September but would be a larger hike than July\u2019s increase. Frederik Ducrozet, the head of macroeconomic research at Pictet Wealth Management, believes that ECB members probably wish they raised the bank rate sooner.<\/p>\n

\u201cWith hindsight, I think many governing council members would have liked to hike rates already in June,\u201d Ducrozet explained. \u201cBut it\u2019s a very difficult situation because you know that we are heading into a slowdown,\u201d the Pictet executive added.<\/p>\n

\"Euro<\/p>\n

Inflation and issues tied to the war in Ukraine have put the EU in a financial pickle with fewer choices on the table. The dreary European economy has also put significant pressure on the euro, the region\u2019s sovereign fiat currency that\u2019s leveraged in 19 economies. The euro tapped a 20-year low on July 5, 2022, hitting $1.0281 per euro, which is the lowest value against the U.S. dollar since December 2002.<\/p>\n

Mizuho FX analyst Neil Jones told<\/a> Bloomberg on Tuesday that parity with the U.S. dollar is \u201cjust a matter of time now.\u201d Bloomberg\u2019s options price models indicate that there\u2019s a 60% chance the euro will reach parity with the U.S. dollar. Dominic Bunning, the head of European FX research at HSBC told Bloomberg that it\u2019s \u201chard to find much positive to say about the EUR.\u201d The analyst added:<\/p>\n

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With ECB sticking to its line that we will only see a 25bp hike in July \u2013 at a time when others are hiking much faster \u2013 and waiting for September to deliver a faster tightening, there is also little support coming from higher yields.<\/p>\n<\/blockquote>\n

Pound Sterling Hits 2-Year Low Against the USD, Euro Expected to See More Volatility<\/h2>\n

In addition to the ECB dealing with inflation and issues connected to the war, the United Kingdom is suffering as well. The Bank of England has detailed in a report<\/a> that the U.K.\u2019s economic outlook seems grim, and the central bank notes U.K. households are expected to have payment difficulties. In mid-June, the British pound sterling (GBP) faced the same issues as the euro, as the world\u2019s oldest fiat currency dropped below $1.20<\/a> against the U.S. dollar.<\/p>\n

The GBP has not dropped that low against the dollar in two years since March 2020. Analysts expect the euro to see more volatility between fiat currencies like the U.S. dollar and the Swiss franc. \u201cThe FX market is not back up to full liquidity given the U.S. holiday,\u201d Mizuho\u2019s FX analyst concluded on Tuesday. \u201cAny given size of trade is likely to have a greater impact on market movement.\u201d<\/p>\n

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\nTags in this story
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19 economies<\/a>, Christine Lagarde<\/a>, Dollar<\/a>, Dominic Bunning<\/a>, ECB<\/a>, ECB inflation<\/a>, Economy<\/a>, EU<\/a>, EUR<\/a>, Euro<\/a>, European economy<\/a>, European Union<\/a>, Frederik Ducrozet<\/a>, gbp<\/a>, inflation<\/a>, Mizuho FX analyst<\/a>, Neil Jones<\/a>, pound sterling<\/a>, Swiss franc<\/a>, U.S. dollar<\/a>, uk<\/a>, UK economy<\/a>, USD<\/a><\/div>\n<\/div>\n

What do you think about the euro nearing parity with the U.S. dollar? Do you think that it will hit parity in the near future? Let us know what you think about this subject in the comments section below. <\/strong><\/em><\/p>\n

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\nJamie Redman <\/h6>\n

\nJamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 5,700 articles for Bitcoin.com News about the disruptive protocols emerging today.

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Image Credits<\/b>: Shutterstock, Pixabay, Wiki Commons<\/em><\/p>\n

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