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Dollar soars as fears of a global recession mount | AlMomento.Net

The US currency outperformed other global currencies and rose more than 1% as fears of a global recession and speculation that it could enter parity with the euro mount.

The fear of a recession is causing the large European stock markets to fall with losses of over 3%, in tune with the negative opening of Wall Street, which caused a 10% drop in oil prices and the depreciation of the euro against the dollar, at its lowest since 2002.

The main indicator of the Spanish trading floor, the IBEX 35, fell by 2.48%, the biggest drop since June 12, and stood at 7,959.4 points, its lowest level since the beginning of last March and which places the losses annual at 8.66%.

But in the Old Continent other stock markets showed falls such as 2.99% in Milan; 2.91% in Frankfurt; 2.86% in London and 2.68% in Paris, while the Euro Stoxx 50, which groups the largest listed companies in Europe, fell 2.68%.

In times of crisis, people often take refuge in the world’s largest reserve currency. Bloomberg reports that the dollar index rose more than 5.7% in the April-June period, its best quarter since 2016.

THE EURO FALLS TO MINIMUM SINCE 2002

The euro, which has been depreciating for months due to the increase in interest rates in the world, fell to 1.23 dollars, its lowest since December 2002 and very close to parity with the dollar.

The common currency began to fall after the publication of the PMI index for June of the main countries of the Eurozone, which registered growth, but at the lowest rate in the last 16 months in France; of the last half year in Germany, and of the last 5 and 3 months in Italy and Spain.

According to S&P Global, the consultancy that compiles the index, June “was affected by the first contraction in manufacturing production in two years and by a slower pace of growth in commercial activity in the service sector.”

INFLATION AND RISES IN INTEREST RATES

Inflation, further pressured by the war in Ukraine and sanctions on Russia, and interest rate hikes by central banks, are holding back the economy and many investors fear that this strategy could end up causing a recession.

The lower forecasts for global oil demand caused Brent crude, the reference in Europe, to fall by up to 10% at the close of the stock markets in Europe and stood at 102 dollars a barrel, a price not seen since May 11 past.

The TTF natural gas ended the session with a fall of 0.5%, although shortly before noon it reached 175 euros per megawatt hour, a maximum in four months, due to fears of a reduction in supply from Russia as a result of the war of Ukraine.

(With EFE and FRANCE 24)

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