Is the Euro really going to rise?
Nothing is definitive regarding the return of the euro to its rise in the foreseeable future, because this answer cannot be predicted without going into details:
1- The Ukrainian-Russian war and its consequences on the ground. Will it expand to other European regions? Are the battles escalating or confined to eastern Ukraine?
2- The sanctions imposed on Russia, and the retaliatory measures that Moscow may take once morest Europeans and the West in general, especially if it continues to cut off gas from the European continent or resorts to the option of reducing production in agreement with the “OPEC Plus” countries, led by Saudi Arabia, which did not attend a visit US President Joe Biden has the right to make any oil profit in terms of raising production.
3- The protectionist measures taken by the United States, such as raising interest rates, and the inability of the European continent to keep pace with them.
The depreciation of the euro exchange rate is primarily caused by inflation, which hit the whole world, as a result of the Corona virus, and later the war in Ukraine. As a result, the United States resorted to raising interest rates, and this increase was the largest among the increases decided by the “Federal Reserve” since 1994. The impact of raising interest rates in the United States was like the impact of a “black hole” on capital, which gravitated towards the United States like a torrential torrent. In order to make profits, it affected all capitals around the world, especially money in the European continent, which had to abandon the euro for the sake of the dollar, and this is another additional reason that justifies the dollar’s rise once morest the euro.
The price is in the hands of Moscow..and winter
The European Central Bank was unable to keep pace with the US measures, due to considerations related to the weak European economy. European experts say that raising interest rates in the European Union may cause more economic stagnation, which is already associated with a worrying rise in energy prices that Russia is holding from its side, and through which it threatens the entire European economy. Not only that, but these prices have become a reason for the resignation of a number of European heads of government, as they led, albeit equivocally and indirectly, to the resignation of Boris Johnson in Britain and Mario Draghi in Italy, and it is threatening German Chancellor Olaf Schultz with the same thing today.
Energy prices in the European continent directly affect production costs, and over time they will destroy commodity prices, which will rise affected by emergency and high costs, which in turn will lead to a decline in European commodity competition, i.e. a decrease in demand for the euro currency because it is no longer needed.
Read also: Does the safety of the 5 million paper print?All this may lead us to more pessimistic perceptions of the fate of the euro exchange rate, especially at the beginning of the next winter, as it seems that the prices of gas necessary for factories in all of Europe will create an additional problem that exceeds the crisis of manufacturing and export, which is the heating problem that today is troubling the old continent, and frankly foretells That the future of the euro exchange rate, whether up or down, may be linked to the extent of the West’s willingness to lift or tighten sanctions on Russia, and this indicates that the euro exchange rate may be closely linked to Moscow’s decisions!
