Sino-Singapore Jingwei is on July 12th!
On the 12th, the euro-dollar exchange rate fell to 1 in the short-term.
As of press time, the euro was at 1.0005 against the dollar, down 0.34%.
According to Reuters, fears that the energy crisis will tip the euro zone into recession, while expectations of a faster and larger rate hike by the Federal Reserve boosted the dollar.
CCTV news reports also pointed out that the weakening of the euro exchange rate is mainly due to the recent slowdown in European economic growth, and the market has continuously lowered expectations for the European Central Bank to raise interest rates.
In addition, the market's expectations for a larger rate hike by the US Federal Reserve at the end of July strengthened, leading to a strengthening of the US dollar exchange rate.
According to reports, market participants believe that the European Central Bank expects to raise interest rates to curb inflation, and is worried that the increase in interest rates will lead to increased debt pressures in some southern European countries, so they are slow to take action.
The European Central Bank's pace of tightening has lagged far behind the Fed, weighing on the euro's exchange rate.
In addition, the Eurogroup said on the 11th that due to adverse factors such as high energy prices and deteriorating global terms of trade, the 19 member states of the euro area are now facing further inflationary pressures, while the economic growth prospects of the euro area have been weakened.
Shanxi Securities Research Report pointed out that since July, with the US dollar index rising, the exchange rate of the euro against the US dollar has fallen rapidly.
On the whole, the rapid drop in the exchange rate of the euro against the United States is mainly due to the widening of interest rate differentials in the euro zone countries, which has led to the resumption of the European debt crisis and the rise in recession expectations.
Will the euro keep falling?
Shanxi Securities said that no matter from the perspective of tightening or economic support, the euro-US exchange rate still has a further downward logic, superimposed on the frequent occurrence of geopolitical problems and the spread of de-globalization in the post-epidemic era, the value of the US dollar's safe-haven attribute will be The strengthening puts the EUR/US exchange rate under passive pressure, and may fall below parity in the second half of the year, challenging the 0.98 support point.
Shanxi Securities also believes that the repeated depreciation of the euro ultimately points to a decline in external demand, reflecting that my country's exports to Europe are under pressure, thus affecting the profit expectations and profitability of related companies.
At the same time, the resurgence of the European debt crisis alarm may affect the risk appetite of the A-share market in stages. It is recommended to pay attention to the European Central Bank. However, the medium and long-term impact of the above shocks is limited and not sustainable. my country's market is expected to be based on the certainty of economic growth. And gradually reproduce the "safe haven" advantage.
In the early morning of July 12, Beijing time, the U.S. dollar index hit a new high in nearly 20 years. As of late trading in New York, the U.S. dollar index rose 0.95% to 108.0220.
As of press time, the U.S. dollar index was at 108.4886.