Euro Is Expected to Continue Falling, According to Experts

  • Publish date: Thursday، 14 July 2022
Euro Is Expected to Continue Falling, According to Experts

The price of the Euro fell in trading on Tuesday, below the level of parity with the US dollar, for the first time in 20 years, amid expectations of broad effects on financial markets, investment, and global currencies.

There were many reasons that led to the drop in the price of the Euro for the first time, to be traded at less than one dollar (Euro = $0.99).

Experts attributed this decline to unprecedented rises in inflation rates in the European continent, affected by the Russian-Ukrainian war, in addition to the significant increase in the exchange rate of the US dollar against currencies in the recent period after the US Federal Reserve’s decisions to raise the interest rate 3 times during 2022 to reach 1.75% and expectations of a continuation of the increase to reach 4% levels by the end of the year.

At the same time, the European central banks did not maintain the interest rate movement at rates that accommodate this inflation and maintain the strength of the currency, as the European Central Bank raised interest rates for one time since the beginning of the crisis.

It is expected that the Euro will continue to decline against the US dollar in the coming period at a rate of 5-10%. It is also expected that the European Central Bank will reconsider the policy of raising interest rates to curb the rise in inflation witnessed by the continent during that period.

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