Falling below the 1.02 mark! The euro exchange rate fell below parity
On January 14, the euro opened at 1.0216 against the US dollar. As of press time, the euro fell to 1.0278 against the US dollar, with a low of 1.0216.
As global markets cooled expectations of the Fed’s rate cut, the euro-dollar exchange rate briefly fell below the 1.02 mark on January 13, reaching a low of 1 to 1.0178, the lowest since November 2022.
The euro rebounded on the 13th and closed slightly higher on the daily line. In this regard, analysts believe that the labor market data released by the United States on the 10th exceeded expectations, driving the continued strength of the US dollar, further suppressing market expectations of the Fed’s rate cut, and was the direct cause of the decline in the euro-dollar exchange rate that day. The European economic outlook is relatively weak, and the European Central Bank tends to further relax monetary policy to promote economic growth. The gradual increase in the differences in monetary policies between the United States and Europe has led to increasing market concerns that the US government’s tariff measures may have an impact on Europe, resulting in a continued decline in the euro-dollar exchange rate in recent days. Experts suggest a cautious approach to rate cuts.
It is worth noting that Goldman Sachs recently lowered its expectations for the euro, predicting that the euro-dollar exchange rate will fall below parity to 1 to 0.97 within six months. In contrast, the company raised its forecast for the dollar, citing a strong U.S. economy and the possibility of rising tariffs, which could slow monetary easing.
As the euro exchange rate continued to fall, rising bond yields in many European countries put pressure on the stock market. Stocks in categories such as energy and mining fell across the board, and the three major European stock indexes closed down collectively on the 13th. As of the close, the British stock market fell 0.29%, the French stock market fell 0.30%, and the German stock market fell 0.41%.