Early Wednesday the euro market opened up with staggering Dollar prices. The safe heaven that once enjoyed a high peak was seen sloping downwards. The U.S. inflation data that will be released before the end of the week has already led the Euro to parity. This could lead to U.S. Federal Reserves further tightening monetary policies.
As a result of the economic scenario, the Dollar Index traded 0.1% higher to 107.977. The greenback which measures against six other major currencies has been staggering as of Tuesday it opened up higher only to fall back down early Wednesday.
The Eur/USD pair didn’t change position trading at 1.0038. This has been an improvement on the previous week’s performance where the Euro was just above a two-year decade low.
Investors await U.S. economic data that is to be released later this Wednesday. This data will determine the fate of the global economy as the federal reserve will decide whether or not to continue tightening monetary policies.
U.S. year-on-year inflation increased by almost 9% in June. May data showed that inflation was 8.6%. This is the highest it has been in over four decades.
The U.S. economy is not the only one suffering, the European economy has taken a big hit since the Russian- Ukraine war, leading to an energy crisis. The shortage of gas exports has led the European central banks to implement a cutthroat interest rate with no signs of easing any time soon.