The talk across markets so far this week has been around the continued surge in the US dollar and the EURUSD pair reaching parity after 20 years. The greenback continues to fly after some chunky rate rises from the Fed have supercharged it. The eurozone, with its energy crisis and proximity to the Ukrainian war, is expected to endure significant growth issues in the near term. The relative dovishness of the ECB in comparison to the Fed has additionally provides extra weight to the common currency.
The fall of the EURUSD has been swift and aggressive considering it was trading at $1.15 back in February. Markets have come to the conclusion it’s more of a when rather than if, the euro breaks below 1.00 against the buck. As of this morning, the rate traded to within 5 pips of the 0.99 handle! Buckle up, the next few hours couple be interesting for markets.
Written by Viv Savani. 8:19am, July 12th 2022
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