The benefits of the dollar – High inflation: euro as weak as 20 years ago


The euro continues to be under pressure in the financial markets. On Thursday evening, the common currency fell to $0.9809, its lowest level in about 20 years. Like many other currencies, the euro has been weighed down by the strong dollar.

On the one hand, the US currency is benefiting from the tight monetary policy of the US Federal Reserve, which sharply raised its key interest rate by 0.75 percentage point for the third time in a row on Wednesday evening. The background is the very high inflation.

Dollar benefits from West’s poor relationship with Russia
On the other hand, the dollar is in demand due to the increasingly bleak geopolitical situation. Above all, the poor relationship between the West and Russia is driving investors to the safe haven of the US dollar.

The Japanese yen is also under pressure
The Japanese yen was also under pressure in the morning. The central bank of the world’s third-largest economy is holding on to its loose line, as the Bank of Japan announced. Inflation in Japan is significantly lower than in other countries.

However, it is increasing and is relatively high, at least by Japanese standards. However, the central bank is making no move to tighten its extremely accommodative monetary policy, which has weighed heavily on the yen for months.

Source: Krone


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