GENERICO.ruWorldMedia: the euro was in "free fall"

Media: the euro was in “free fall”


Euro. Archival photoMOSCOW, May 1. The uncertainty associated with the possible tightening of anti-Russian sanctions and their impact on the European economy could put even more pressure on the euro, which is already in a bad position, according to the material Deutsche Wirtschafts Nachrichten. According to the publication, the European currency is now in “free fall”, and its exchange rate against the US dollar reached its lowest level since 2017.The euro fell below $ 1.05 for the first time in five yearsAccording to analysts at the German Bayern Landesbank, the dollar will continue to strengthen as the US Federal Reserve plans to raise interest rates to combat high inflation. At the same time, the uncertainty associated with a possible tightening of sanctions against Russia and their impact on the European economy, may continue to put pressure on the euro. According to many experts, Europe will suffer more from the economic consequences of the Ukrainian crisis than the United States, DWN points out. In addition, according to VP Bank chief economist Thomas Gitzel, the euro cannot benefit from three interest rate hikes planned by the European Central Bank this year. “In the currency markets, there are big concerns that a stronger slowdown in the euro area – or even a recession – could still shake the planned course of tightening,” he said. According to Gitzel, a recession, high inflation and the inability or unwillingness of the ECB to act will be “the most terrible scenario.” At the same time, consumer sentiment indicators also had little effect on the euro, the publication states. According to the research company GfK, after a second deterioration, this indicator in Germany reached a record low. “Growth hopes as a result of the easing of restrictions imposed due to the pandemic have finally collapsed,” said GfK consumer goods expert Rolf Bürkl. Previously, former Deutsche Bank chief economist Thomas Mayer said that euro instability could push citizens to look for an alternative to the official currency. In his opinion, the European Union expects prolonged inflation, which could “kill the euro”.

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