The euro is continuing its descent of the past few months at a rapid pace. The common currency fell to its lowest level in almost 20 years against the dollar on Tuesday. At its lowest point, a euro cost 1.0248 dollars, the lowest it was at the end of 2002. The euro has been burdened for some time by the sometimes very gloomy mood on the international financial markets. In contrast to the euro, the dollar benefits because many investors value it not only as a safe form of investment, but also as a very liquid form of investment due to the size of the US financial market. A central argument for the weak euro is that Europe is much more affected by the consequences of the Russian war against Ukraine than the USA. The main reason is the high dependency of many European countries on Russian raw materials such as crude oil or natural gas. On Tuesday, the European natural gas price temporarily rose by nine percent for fear of increasing bottlenecks. Another reason for the weakness of the euro is that many central banks are reacting much more decisively to the high inflation than the ECB. While the US Federal Reserve has raised its key interest rate several times and significantly, the ECB has only been able to make an announcement so far.
The price of oil fell sharply. The price of Brent from the North Sea fell by more than nine percent to $102.98 per barrel (159 liters). Federal bonds were in demand, causing the yield on ten-year titles to drop to 1.184 percent. However, the “anti-crisis currency” gold was unable to benefit from the current situation and fell 2.2 percent to $1,767 per troy ounce (31.1 grams). “The precious metal is considered a safe haven in uncertain times,” said analyst Ricardo Evangelista from brokerage house ActivTrades. “But the interest rate hikes by the central banks reduce its attractiveness because it doesn’t yield any interest.”