The euro fell this Thursday to $0.98, the lowest level in 20 years, after the United States Federal Reserve (Fed) raised interest rates and announced new hikes.
At 17:55 (Lisbon time), the euro was still trading at $0.98438 when it traded at $0.98704 on Wednesday.
The European Central Bank (ECB) set the reference exchange rate for the euro at $0.9884.
The Fed announced this Wednesday a rise of 75 basis points in its interest rate, an increase equal to the one it had decided in its last two meetings, in June and July.
The US central bank said in a statement that it “anticipates further increases will be needed in 2022” in the face of persistently high inflation.
“After maintaining levels close to par during the last month, the euro finally sank under the pressure of the rise in interest rates in the United States,” say analysts at Monex Europa, quoted by Efe.
On Thursday, the Swiss National Bank also adopted a 75 basis point hike, while Norway’s Bank of England and Norway’s Bank of Norway approved hikes of 50 basis points.
The Bank of Japan maintained its interest rates, but intervened in the foreign exchange market to stop the depreciation of the yen.
The intervention came after the dollar hit 145.90 yen, a 24-year high.
Source: TSF
