©Reuters. The euro falls on fear of recession
Frankfurt (Germany), Jun 23 (.).- The euro depreciated this Thursday after statements by the chairman of the US Federal Reserve (Fed), Jerome Powell, fueled fears of a recession.
The euro was trading at $1.0521 as of 3:10 p.m. GMT, versus $1.0587 in late European forex trading the previous day.
The European Central Bank (ECB) set the exchange rate for the euro at 1.0493 dollars.
Risk aversion returned to the currency market today and took the euro below $1.05.
Subsequently, the single currency managed to recover some positions after the publication of figures for the US economy.
The weekly number of applications for unemployment benefits in the United States fell last week to 229,000, compared with 231,000 the previous week.
The US current account posted a record deficit of $291.4 billion in the first quarter.
The president of the Fed fueled the fear of a recession by considering more increases in the price of money justified because it is “essential to lower inflation.”
Powell said in the US Senate that the Fed will have to raise interest rates above the neutral level of 2.5%, a figure that neither slows down nor boosts the economy.
The data of the economy of the euro countries also show a rather pessimistic picture, according to experts.
“Euro zone economic growth slows sharply to a sixteen-month low in June as demand stops growing and sharp price increases continue,” according to S&P Global, formerly IHS Markit.
The flash of the composite index of the total activity of the euro zone, of the manufacturing and services sectors, fell to 51.9 points in June (54.8 points in May), registering its minimum of the last sixteen months.
The single currency was traded in a trading band between 1.0484 and 1.0580.