
Jun 30, 2022 01:35AM ET
By: AnalysisWatch
The euro struggled to regain its footing Thursday after plunging overnight against a resurgent U.S. dollar, which benefited from safe-haven demand on renewed concerns about higher interest rates and a global recession.
The common currency was up 0.13% at $1.0453 after losing 0.75% against the dollar the previous day.
It was drawing a monthly decline of 2.7% and a quarterly loss of 5.5%.
It also fell against the Swiss franc to a fresh 7-1/2-year low of 0.9963 francs at the start of the Asian session on Thursday.
The Alpine currency was another beneficiary of safe-haven inflows, still basking in the afterglow of the Swiss National Bank's surprise interest rate hike two weeks ago.
Christopher Wong, senior foreign exchange strategist at Maybank, attributed the euro's decline against the dollar to the market's turning away from riskier assets after "central bankers warned of persistent inflation and said they would prioritize fighting it, leading to a broad rally in the dollar overnight."
A steady and aggressive shift to tighter policies has stoked recession fears and rattled financial markets in recent months.
Fed Chairman Jerome Powell said Wednesday at the European Central Bank's annual conference in Sintra, Portugal, that it's important to bring inflation down even if it means economic pain.
Lower German inflation figures also briefly weighed on the euro, said Ray Attrill, head of foreign exchange strategy at National Australia Bank, before "the market realized it was some special factors and not a real negative surprise."
"The bigger concern is what happens to energy supply in the eurozone as we head into winter." We are quite cautious about the euro, "Attrill added.
Comments