Fears of a recession in Europe due to the temporary suspension of Russian gas
The euro reached the level of parity with the dollar for the first time since the introduction of the single European currency for trading twenty years ago, to reach one dollar, after falling below it to record 0.999 against the dollar at 10:14 GMT in trading yesterday, before rising slightly again.
The pressure on the euro is increasing after the Russian gas tap was shut down on Monday for maintenance for 10 days, amid fears of an extension of the closure due to the Ukraine war, which supports the economic stagnation in the old continent.
Looking at the global economic data, we find that the accelerating variables are pressuring all economies around the world, which was evident in the dollar index, which rose against all currencies to record levels.
The appreciation of the dollar usually affects the prices of all other commodities and currencies, because it makes dollar-denominated commodities more expensive for holders of other currencies.
Ricardo Evangelista, currency analyst at brokerage ActivTrades, predicts that the dollar will soon become more valuable than the euro, given the deteriorating outlook for the European economy, while the US Federal Reserve continues its determination to control inflation through tight monetary policy. Evangelista told Asharq Al-Awsat: “In light of these headwinds, the single European currency remains under pressure and exposed to more losses, especially against the dollar.”