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The historical financial event… the euro is close to the dollar

    the euro is close to the dollar

    The historical financial event… the euro is close to the dollar

    The historical financial event… the euro is close to the dollar

    The Euro is nearing parity with the US Dollar for the first time in 20 years, as it settled at $1.05, Thursday morning, after having been in a steady decline for nearly a year.

    The European common currency fell to just over $1.03 earlier this week.

    The dollar strengthened its position due to the fear of risk in the markets, as concerns about the Russian war in Ukraine, high inflation, supply chain problems, slowing growth, and tightening monetary policy, pushed investors toward traditional “safe haven” assets, including the US dollar.

    The narrowing of the gap between the two currencies was also driven by the divergence in monetary policy between central banks.

    EARLIER THIS MONTH, the US Federal Reserve raised benchmark interest rates by half a percentage point, its second increase in 2022, as it looks to rein in inflation at a 40-year high.

    Federal Reserve Chairman Jerome Powell said Tuesday that the central bank would not hesitate to continue raising interest rates until inflation has fallen to a manageable level and reiterated its commitment to bring it closer to the Fed’s 2% target.

    In contrast to the Federal Reserve and the Bank of England, the European Central Bank has not raised interest rates despite record inflation across the eurozone.

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