Euro Risks Decline Following the Continuous Rate Hike By The Feds

Euro

The U.S price rate increase runs out the reverse markets expectations yesterday with a reduced hostile Federal Reserve causing EUR/USD currency pair to move below parity.

Despite the European Central Bank (ECB) previous hawkish meeting, yesterday’s release could not be prevented especially when the U.S. economy is exhibiting strong fundamentals compared to the eurozone.

As Europe heads into the winter months, there is a looming serious energy crisis on the region which might widen the two economies discrepancies.

Ursula von der Leyen, the EC President addresses the European Union today deliberating the impending energy crisis and the invasion of Russia by Ukraine. The EC President has promised the EU’s financial support of Є100m for Ukraine and stated the need for diversification from Russia as the principal energy supplier.

The eurozone Industrial production is expected to be lower compared to the June print which could be attributed to higher input costs and lower demand which could restate the diminishing economic backdrop in Europe. The day ends with a higher U.S. Producer Production Index which may continue to support a stronger USD.

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