[ad_1]
©Reuters. The euro falls to a 20-month low against the dollar due to Ukraine and inflation
Frankfurt (Germany), March 2 (.).- The euro fell below 1.11 dollars this Wednesday, the lowest level for about 20 months due to the intensification of the war in Ukraine and after the publication of inflation figures , leading investors to seek refuge in the greenback.
The euro was trading at $1.1104 by 1310 GMT, down from $1.1140 in late European forex trading the previous day, but fell as low as $1.1059 at times.
Russian Foreign Minister Serguei Lavrov assured on Wednesday that US President Joe Biden knows that the only alternative to sanctions against Russia is a third world war and that it would be “a devastating nuclear war”, in statements to the Qatari television Al Jazeera.
The euro has fallen against the dollar “to levels last seen in June 2020, after yesterday’s high risk perception conditions already caused a 1% daily drop amid an escalation of restrictions in Moscow”, consider the analysts of Monex Europe.
Inflation in the euro area climbed to 5.8% in February, seven tenths more than the figure for the previous month.
Concerns are growing in the markets about the economic consequences and inflation of a protracted war in Ukraine.
Russia’s invasion of Ukraine has put further upward pressure on energy prices, which had risen much earlier.
In addition, expectations about interest rate hikes by the European Central Bank (ECB) this year have been reduced.
The Governor of the Bank of Finland, Olli Rehn, has recently said that the ECB should not stop applying monetary stimulus before analyzing the impact of the war in Ukraine.
But because inflation is so high and could rise higher due to higher energy prices, central banks may have to tighten their monetary policies and raise interest rates, even if economies grow less.
Investors flee risk and take refuge in the dollar and 10-year Treasury bonds, whose yields have fallen as a result of the intensification of the war.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
[ad_2]