Euro hits 20-year low against dollar after hike in US interest rates
Categories: US NEWS
Euro hits 20-year low against dollar after hike in US interest rates
The euro fell to a 20-year low against the dollar since 2002, as data pointed to rising bearish risks in the eurozone on Tuesday, as reported by AFP. The euro also took a dive as investors looked at aggressive interest rate hikes by the US Federal Reserve in its fight against inflation, in contrast to the European Central Bank, which is planning more modest hikes.
Economic growth in the eurozone faltered in June, a major survey showed on Tuesday, fueled by rising inflation. S&P Global's monthly Purchasing Managers' Index (PMI), which measures corporate confidence, fell from 54.8 in May to 52.0 in June. "Today's PMI data for Europe highlights the risk of slowing growth at the end of the second quarter and raises the prospect of a contraction in activity in the coming months," he said.
In contrast, most Asian stock markets closed higher on rising speculation that US President Joe Biden is about to roll back some of the Trump-era tariffs on Chinese goods. The mood on trading floors has turned even more gloomy in recent months as observers warned that sharp interest rate hikes aimed at halting price hikes could lead to a contraction.
The uncertainty surrounding Russia's war in Ukraine is increasing. Oil prices remained mixed as traders gauged the market with supply exceeding demand. Investors were also keeping an eye on the fresh Covid outbreak in China, which triggered the city's lockdown. US markets were set to reopen later on Tuesday after 4th of July celebrations.