Al Mayadeen English

  • Ar
  • Es
  • x
Al Mayadeen English

Slogan

  • News
    • Politics
    • Economy
    • Sports
    • Arts&Culture
    • Health
    • Miscellaneous
    • Technology
    • Environment
  • Articles
    • Opinion
    • Analysis
    • Blog
    • Features
  • Videos
    • NewsFeed
    • Video Features
    • Explainers
    • TV
    • Digital Series
  • Infographs
  • In Pictures
  • • LIVE
News
  • Politics
  • Economy
  • Sports
  • Arts&Culture
  • Health
  • Miscellaneous
  • Technology
  • Environment
Articles
  • Opinion
  • Analysis
  • Blog
  • Features
Videos
  • NewsFeed
  • Video Features
  • Explainers
  • TV
  • Digital Series
Infographs
In Pictures
  • Africa
  • Asia
  • Asia-Pacific
  • Europe
  • Latin America
  • MENA
  • Palestine
  • US & Canada
BREAKING
Israeli media platform: The Degel HaTorah party, which has four members in the Knesset, announces its withdrawal from Netanyahu's cabinet.
Local Syrian sources: The raids targeted the road between the village of Al-Mazra'a and the city of Sweida, where forces and factions affiliated with the Syrian Ministry of Defense are advancing.
Local Syrian sources: New raids carried out by Israeli warplanes targeted vehicles and gatherings of military factions affiliated with the new Syrian Ministry of Defense.
Local Syrian sources: Israeli raids target, for the third time, gatherings of Syrian Defense Forces military factions in the southern countryside of Sweida.
The Ministry of Health in Gaza: Gaza Strip hospitals received 120 martyrs and 557 wounded in the past 24 hours.
The Israeli Walla! website: We are running out of stockpiles, our forces are exhausted, and the lives of the captives are in danger. It is time for a ceasefire deal in Gaza.
Several wounded in an Israeli bombardment of a tent in al-Mawasi, south of Khan Younis in the Gaza Strip.
Israeli media: Three wounded, three killed in an ongoing operation in the Gaza Strip.
Al Mayadeen's correspondent in southern Lebanon: Israeli artillery shelling targets the outskirts of the town of Shebaa
Al-Qassam Brigades: The targeting took place at the intersection of 'Street 5' with the western line north of Khan Younis

Euro could slide below dollar parity for first time in 20 years

  • By Al Mayadeen English
  • Source: Agencies
  • 18 May 2022 15:48
4 Min Read

The fall of the single currency is a communal concern that is unlikely to strain the union.

  • x
  • Euro slides below dollar parity for first time in 20 Years.
    Euro slides below dollar parity for the first time in 20 Years.

Europe's single currency has already fallen to a five-year low near $1.03, collapsing from a rush into the greenback as a safe haven from market turbulence and the Ukrainian crisis. As a result, HSBC Holdings Plc and RBC Capital Markets estimate the two will reach parity in 2022.

The euro has already plummeted to a five-year low near $1.03, owing to a rush towards the greenback as a safe haven from market volatility and the Ukrainian crisis. As a result, HSBC Holdings Plc and RBC Capital Markets predict that the two currencies will reach parity in 2022.

“The euro itself is not an attractive currency at the moment,” said Francesco Pesole, a currency strategist at ING Groep NV. While the Dutch bank is keeping its official euro forecast for the next six months at $1.05, Pesole admits the dollar’s strength and market volatility means parity is likely.

Euro in relation to Dollar

To a significant measure, the euro crisis is a result of dollar strength, which has been exacerbated as the Federal Reserve continues to raise interest rates faster than its peers. A new round of global risk aversion, which has knocked the wind out of equities and credit markets, is simply adding fuel to the run into haven currencies.

Read next: EU stocks, oil prices rise, euro at 5-year low against USD

 

Related News

US pressure on Lebanon grows over Resistance disarmament plan

Trump to make historic second UK State visit at King's invitation

The European economy's prognosis is likewise deteriorating. An ongoing stalemate with Moscow over natural gas supplies to the continent has heightened the likelihood of a significant slowdown. The International Monetary Fund has reduced the currency bloc's growth prediction for 2022 to 2.8 percent.

As a result, the European Central Bank is treading water. It must balance the need for stronger policies to limit record inflation with the danger of economic harm, notably in some of the region's most indebted member countries, such as Italy. While officials may raise interest rates above zero before the end of the year, additional hikes are doubtful.

ECB officials see rate exceeding zero this year

Investors will be watching statements from ECB President Christine Lagarde, as well as the minutes of the bank's April meeting on Thursday, for more signs on thinking in the coming days. Lagarde has joined the chorus of policymakers calling for a rate hike as soon as July.

“I think it’s politically difficult for many in the ECB to sound too dovish, considering that inflation has likely not yet peaked,” said Peter McCallum, a rates strategist at Mizuho International Plc. “Unless we get 50 basis-point hikes being talked about, it’s tough for many of the hawks to surprise the market now.”

Any renewed euro selloff that breaks through the January 2017 low of $1.0341, which was almost reached on both Thursday and Friday, might put the currency up for more losses.

A risk

With the region's bonds being dumped as well, the currency market may begin to factor in eurozone debt problems, according to HSBC Holdings Plc strategists including Dominic Bunning. For the first time since the pandemic's early days, the margin between Italian and German yields surpassed 200 basis points this month.

Not everyone is pessimistic. According to Roberto Mialich, a currency analyst at UniCredit SpA, the euro will rise back above $1.10 in the coming year as the Fed's rate hike cycle slows. He sees a sustained below-parity situation as a tail risk, and only if eurozone GDP slows significantly more than expected.

Read next: Euro slumps amid Ukraine tensions

 

However, as long as risk assets remain fragile, conventional safe havens such as the dollar and the yen will remain popular. Russia's war in Ukraine is also a significant headwind for the euro, especially given the possibility of more delays in gas supplies.

“The euro has already faced more downward pressure than we expected, but we find it hard to see a silver lining for the single currency at this stage,” HSBC strategists wrote in a note, pointing to downward revisions to growth forecasts and upward revisions for inflation. “This is a nasty cocktail for any currency to try to digest.”

  • United States
  • Dollar
  • Euro
  • European Union

Most Read

Hezbollah SG reveals war details on Al Mayadeen for the first time

Hezbollah SG reveals war details on Al Mayadeen for the first time

  • Politics
  • 8 Jul 2025
Major ambush in Gaza kills 6 Israeli troops, injures dozens

Major ambush in Gaza kills 5 Israeli troops, injures 14

  • Politics
  • 8 Jul 2025
Israeli soldiers are seen in Beit Hanoun ahead of an operation by the al-Qassam Brigades, undated (Al-Qassam Brigades Military Media)

'Israel' on blast as media exposes report discrepancies in Gaza ambush

  • Palestine
  • 8 Jul 2025
Yemen Navy sinks ETERNITY C ship, shares footage of operation

Yemen Navy sinks ETERNITY C ship, shares footage of operation

  • Politics
  • 9 Jul 2025

Coverage

All
The Ummah's Martyrs

Read Next

All
The Freedom Flotilla ship Handala as it departs for Gaza, where it aims to break the maritime blockade at a port in Syracuse, Sicily in southern Italy on July 13, 2025. (AFP)
Palestine

Freedom Flotilla's Handala departs Sicily in bid to break Gaza siege

The container ship CMA CGM Laperouse, left, docks at the Georgia Ports Authority's Port of Savannah, Sept. 29, 2021, in Savannah, Ga (AP)
Politics

US shipbuilding woes deepen as tariffs, outdated policies backfire

Gaza war raises ethical questions for ex-Obama, Biden officials
Politics

Mercenary firm tied to Gaza war crimes hires Obama-Biden PR operatives

'Israel' targets children in Gaza collecting water
Palestine

'Israel' strikes Gaza kids fetching water, blames it on 'malfunction'

Al Mayadeen English

Al Mayadeen is an Arab Independent Media Satellite Channel.

All Rights Reserved

  • x
  • Privacy Policy
  • About Us
  • Contact Us
  • Authors
Android
iOS