- January 21, 2023
- Posted by: Stratford Team
- Category: Economy
The euro has bounced back since falling below parity with the US dollar last September, aided by cooling energy prices, receding fears of a deep recession later this year and an increasingly hawkish European Central Bank.
Up about 13 per cent over the past three and a half months, the euro’s rise to its current level close to $1.08 has been aided by a broader retreat for the dollar, which is down roughly a tenth against a basket of six peers since touching a 20-year high in September.
The US Federal Reserve last year lifted its main policy rate by 4.25 percentage points, the largest one-year increase in four decades. The growing interest-rate gap with other economies lured investors to the US, boosting the dollar, just as soaring energy prices exacerbated by the war in Ukraine threatened economic turmoil in Europe, denting the euro’s allure.
Both trends have reversed somewhat since then, however. “For several years, there was almost no…
