EUR Drops Below USD for the Second Time in 20 Years, Greenback’s Strength Leads to Largest Weekly Rise Since March 2020
The U.S. dollar has been very strong compared to a myriad of fiat currencies worldwide and this week, the euro dropped below the USD for the second time in 20 years after meeting parity with the dollar in mid-July. The dollar’s recent brawniness has resulted in the largest weekly rise since March 2020, according to Commodity Futures Trading Commission (CFTC) data. US Dollar Rises, Euro Falters — Stocks, Precious Metals, and Cryptos Drop Lower
On Monday, the Dow Jones Industrial Average dropped 400 points as inflation fears continue to grip Wall Street. The four major stock indexes — NYSE, Nasdaq, Dow, and S&P 500 — all started off the morning (EST) in red compared to the gains recorded last week. Gold and silver markets have felt downward pressure this week as both precious metals are down in value on Monday morning. Furthermore, the global cryptocurrency market capitalization is down 1.4% today as well, and hovering just above the $1 trillion mark. U.S. dollar currency index (DXY) on August 22, 2022.
The start of the week has seen the euro falter below the U.S. dollar for the second time in 20 years. At the time of writing, the two fiat currencies are trading for the exact same amount of value but the euro slipped down to $0.99 early Monday morning (EST). The euro dropping below and meeting parity with the USD also took place on July 12, 2022, when the USD rose to 1.0098. On Monday, August 22, the dollar index (DXY) continues to show strength at 108.711. Euro value according to Google statistics on August 22, 2022, at 11:15 a.m. (EST).
Reuters reports that the euro’s drop on August 22 is due to an energy and petroleum crisis Europe has been dealing with since the start of the Ukraine-Russia war. Meanwhile, Reuters also crunched data stemming from the CFTC and the numbers show the “U.S. dollar net longs hit highest since early March 2020.” Many believe as long as the war persists and the Federal Reserve continues interest rate hikes and monetary tightening, the greenback will remain robust. China’s Real Estate Mayhem Causes Central Bank to Slash Rates Amid US Federal Funds Rate Hike Fears
In addition to the robust dollar and the war in Europe, China’s economy has been dealing with a major real estate crisis. Earlier this week the mega theater chain in China Cineworld, has shown signs of financial weakness and it was speculated that the company was near bankruptcy. On Monday, China’s central bank cut the benchmark lending rate and the mortgage reference rate to ease the economy’s pressures.
With the strong dollar, Wall Street’s main indexes in the red, gold and silver down, and the crypto economy floundering, reports indicate that the fear stems from the Federal Reserve’s next rate hike. However, after the U.S. central bank raised the federal funds rate by 75 basis points (bps) last month, estimates gathered by Reuters say the Fed may be softer this month.
“The U.S. Federal Reserve will raise rates by 50 basis points in September amid expectations inflation has peaked and growing recession worries, according to economists in a Reuters poll,” the report detailed. Tags in this story China real estate, Dollar, economics, EUR, Euro, Fed, Fed Hike, Finance, Financial Markets, Greenback, Major Indexes, Mortgage Rates, Rate Decrease, stocks, Ukraine-Russia war, US Dollar, USD, Wall Street
What do you think about the U.S. dollar’s strength and the euro dropping below the USD’s value? What do you think about the macroeconomic issues plaguing today’s financial markets? Let us know what you think about this subject in the comments section below. Jamie Redman
Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 5,700 articles for Bitcoin.com News about the disruptive protocols emerging today. Analyst Says if Silver Dips Below $18, Precious Metal Could "Get Absolutely Smoked" — Morgan Report Founder Expects a Supply Crunch FINANCE | 1 day ago CME Group to Offer Market Participants Ethereum Options 3 Days Before the Merge FINANCE | 4 days ago
Image Credits: Shutterstock, Pixabay, Wiki Commons Previous articleAsia’s Largest Web3 Event TOKEN2049 Hits 200 Sponsor Milestone, Announces New Headline Speakers Next articleMorgan Stanley Analyst Says Crypto Economy’s Liquidity Improved, but There’s ‘No Huge Demand to Re-Leverage’ Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments More Popular NewsIn Case You Missed ItCentral Bank of Brazil Confirms It Will Run a Pilot Test for Its CBDC This Year
The Central Bank of Brazil has confirmed that the institution will run a pilot test regarding the implementation of its proposed central bank digital currency (CBDC), the digital real. Roberto Campos Neto, president of the bank, also stated that this ... read more.NFT Sales Volume Saw a Small Uptick This Week — Moonbirds, Mutant Apes Take Top Sales Bill ‘On Digital Currency’ Caps Crypto Investments for Russians, Opens Door for Payments Privacy-Centric Monero Plans for July Hard Fork, Plans Include Ring Signature, Bulletproof Upgrade Interest in Real Estate Investments in Spain Grew 400%, With Some Using Crypto and Stocks as Payment Method