Enter your emailAt the end of last week's trading, the EUR/USD exchange rate fell by a full percentage to reach the 1.0885 support level, its lowest since May 2020. After this performance, analysts say that it could decline significantly amid a significant deterioration in the conflict in Ukraine.
Accordingly, analysts say that further losses in the value of the single currency of the eurozone are likely to continue, as Russian President Vladimir Putin is on the path of destruction. US Secretary of State Anthony Blinken has warned that the threat of an escalation into a broader conflict is now very real.
The Eurozone and EU economy in general is expected to suffer a major blow to growth and increased inflation due to its geographic proximity to the conflict scene, as well as highly integrated energy linkages. Accordingly, analysts say, the rapid and widespread rise in commodity prices has caused major shifts in countries' terms of trade.
The deterioration in the eurozone's economic outlook is likely to lead to a dose of caution in upcoming ECB policy decisions, with economists saying the Governing Council will certainly delay plans to "normalize" policy. Recently an analysis from ING Bank N.V. The war in Ukraine will dampen the pace of the eurozone recovery and push inflation to around 4% for the year.
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Source: FXStreetNews - 🏆 14. / 72 Read more »
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