Euro hits one-month low against the US Dollar

FXOpen

It could be fair to say that the US Dollar, and the wider economy across the United States is an anomaly and has been for over a year.

Despite the same lockdowns in many major centers as other Western economies, the same supply chain difficulties disabling all sectors of industry to the same extent as that of Western Europe, and a similar approach toward involvement in geopolitical matters between the West and Russia, the American economy is not in anything like the bad condition experienced in other regions.

To compound this oddity further, the US Dollar has retained a very strong position against all other major currencies throughout the entirety of last year.

Yesterday, the US Dollar has shown its strength again, as the Euro has fallen to a one-month low against the greenback, with the rate now being at the low end of the 1.05 range during the early hours of the European trading session.

Some data released on Tuesday has put a dampener on the value of the Euro, one such metric being that retail sales within the Euro-denominated area, a good proxy for consumer demand, rebounded much less than expected in January, challenging other data, including PMI surveys, which pointed to a steady recovery.

Energy prices are continuing to soar across Europe, contributing massively to the overall increases in cost of living, which in some areas of Eastern Europe is compounded by inflation rates at over 25%, meaning that spending is outstripping earnings on a continual basis.

In Western Europe, the 10% average inflation is still a major barrier to economic stability and growth, whilst in the United States, the levels of inflation have been reducing over the past 6 months and are now at around 6%.

Manufacturing and productivity in the United States remained at least partially open during 2020 and 2021 with the states of Florida and Texas not conducting lockdowns. These are both heavily industrialised states and aside from their existing high technology, medical products, agricultural, energy production and scientific research sectors, attracted many other businesses from across the United States which relocated their offices to these states during 2021 and 2022.

This could be a contributor to the strength of the US dollar by comparison to the Euro, as the entire Eurozone limped in and out of lockdowns for almost 2 years and now the piper has to be paid.

Retail sales rose 0.3% on the month, below the 1% rise forecast by economists, and were down 2.3% year on year, demonstrating that this stagnation is continuing, and with more interest rate rises on the horizon, the belt is tight.

Trade over 50 forex markets 24 hours a day with FXOpen. Take advantage of low commissions, deep liquidity, and spreads from 0.0 pips. Open your FXOpen account now or learn more about trading forex with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latest from Financial Market News

Weekly Market Wrap With Gary Thomson: US500, USD, US Inflation, USD/JPY Australian Dollar Volatility Ends in Lull Ahead Of US Data Weekly Market Wrap With Gary Thomson: CHF, CAD, GOLD, TSLA Weekly Market Wrap With Gary Thomson: CAC 40, AUD, OIL, AMAZON The US Continues to Trump the Euro Economy on Key Metrics, But What Is Next?

Latest articles

Forex Analysis

US Dollar Shows Record Weekly Gain Since Mid-January

The US dollar strengthened on Friday ahead of a series of highly anticipated central bank meetings next week, including the US Federal Reserve. The dollar rose 1.3% for the week, its biggest gain since mid-January, after a mixed batch

Shares

Tesla Stock Hits a Low Point as Musk Sues Openai - Is This Year a Total Write-Off?

Occasionally during the course of industrial progress, there is a maverick; a voice that is known for continual disruption and maintaining a high-profile position whilst engaging in such disruption. The figure of this decade is Elon Musk, a self-starter whose

Trader’s Tools

Analytical Forecasts: How Much AAPL Stock May Cost in the Next 10 Years

In today’s tech landscape, Apple Inc. has consistently been at the forefront, shaping the future with its innovative products and services. As investors and enthusiasts alike ponder the future value of Apple stock, particularly looking ahead to the next

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65.68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.