Euro falls to an all-time low against the US dollar


The single European currency – the euro (EUR), which celebrated its 20-year on the international foreign exchange – Forex market this year, fell to its all-time low against the US dollar (USD). On Tuesday, 5 July 2022 the global currency pair EUR /USD traded at a mutual exchange rate of US$ 1.0265 per EUR. This exchange rate was achieved in a situation where, according to the US Dollar Currency Index (DXY), we saw the USD at a price level of 106.49 USD with a daily increase of +1.29%.

Today, on 7 July at 7:24 am CET, this currency pair traded on the Forex at US$ 1.0207 per EUR with a daily gain of +0.26% so far. This current rate indicates, compared to Tuesday’s data, a continued decline of the EUR against the USD and even today the currency pair was briefly trading below US$ 1.02 per EUR, more precisely at US$ 1.0179 per EUR. At the same time, during the European Thursday morning of 07 July, according to the DXY, we saw the USD at a price level of 106.82.

This current exchange rate of the EUR and the USD clearly indicates that the so-called exchange rate parity of both currencies was already broken during Tuesday, 5 July. According to analysts and financial strategists, the current rate is a reflection of investor sentiment, with investors having the real concerns regarding the economic recession of the eurozone. Based on the statements of these experts, the economic recession in Europe and especially in the eurozone is completely inevitable. The fact that the inflation rate for the last 12 months, in June this year, has already reached a record increase of 8.6% testifies to it. At the same time, according to economic correspondents, investor morale in the 19 countries of the eurozone also fell, and according to the July data, the Sentix index reached its lowest level.

According to a survey from Monday, 4 July, investor morale in the eurozone, measured by this very Sentix index, fell – at the beginning of this month – to the lowest level since May 2020, which points to an “inevitable” recession in the currency bloc of 19 countries. In June this year the Sentix index for the eurozone fell to -26.4 from -15.8 points. In July Reuters reported a figure of -19.9. “The energy crisis… is leading to considerable economic distortions,” Sentix Managing Director Manfred Huebner said in a statement regarding the state of the index. “In every respect, the dynamics are reminiscent of the crisis year 2008, and what was then the collapse of the financial system is now the danger of the collapse of the European energy supply”, he added. According to Mr. Huebner, “situation scores like the current one justify the expectation that a recession is inevitable.” Financial analysts and strategists believe that the sluggish approach of the European Central Bank (ECB), which has not raised interest rates in 11 years, is to some extent responsible for the euro fall.  The ECB has only recently sent a signal that it is preparing to do so.