The euro is approaching the US dollar for the first time in 20 years as it fell to $ 1.05 on Thursday morning after nearly a year of steady decline.
The European currency fell to just over $ 1.03 earlier this week.
The dollar strengthened its position in markets amid fears of risk as worries about Russia’s war in Ukraine, high inflation, supply chain problems, slowing growth and tightening monetary policy pushed investors toward traditional assets of a “safe haven” ” Pushed. U.S. dollar.
The narrowing of the gap between the two currencies was also due to divergence in monetary policy between central banks.
The US Federal Reserve raised interest rates by half a percentage point earlier this month, its second increase in 2022, as it appears to curb inflation, the highest level in 40 years.
Federal Reserve Chairman Jerome Powell said Tuesday that the central bank will not hesitate to raise interest rates until inflation falls to a modest level, reiterating its commitment to bringing it closer to the Federal Reserve’s 2% target.
Unlike the Federal Reserve and the Bank of England, the European Central Bank has not raised interest rates despite unprecedented inflation across the eurozone.
Source: Lebanon Debate
