For the first time, since when the euro was released as currency in the European Union, the dollar exceeded its price and stood at 0.98: that is, each dollar is equal to 0.98 euro cents. Around 9 in the morning this Friday, the price in euros per dollar rose to 0.99 euro cents, and then fell back to 0.98.
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The fall of the euro accelerated this Friday and the single European currency went below 1 dollar for the first time since the end of 2002, weighed down by the concern generated by the economy of the ‘old continent’.
In early trading, the euro was down 0.49 percent at $1.0110, having dipped as low as $1.0072 a little earlier, approaching parity.
“Natural gas is going to drive the euro below parity, whatever the reaction of the European Central Bank (ECB),” estimated Derek Halpenny, an analyst at MUFG.
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Due to problems with Russian exports, gas prices soared on Thursday, reaching levels not seen since March and the invasion of Ukraine.
The prospect of a gas shortage in the euro zone prompts traders to move away from the single European currency. And to avoid a blow to economic activity that this would represent, the ECB is currently hesitant to raise its interest rates too quickly, despite inflation.
In addition, the risk of an “interest rate divergence” between euro zone countries prompts the ECB to be cautious, said Matthew Ryan, an analyst at Ebury.
“The euro will continue to approach parity unless the ECB adopts a shock measure, such as a 0.50 percentage point hike” in its main interest rate, estimated Ipek Ozkardeskaya, an analyst at SwissQuote.
EFE