The price of the euro fell below the dollar in Peru, according to BCR

Euro continues to fall, now trading below the dollar in the Peruvian market, according to the latest data released by the Central Reserve Bank (BCR).

At the close yesterday, August 23, the price of the euro was S/3.85 at the interbank level, while dollar In Peru, it cost 3863 s/z.

Before the close of the last day, the euro was worth 20.12% lower than 12 months ago.

The difference may seem minimal, but agencies warn that Euro it is close to its lowest level in two decades.

The euro briefly traded at $1 on Tuesday but fell to $0.99175 in European session, just above Tuesday’s 20-year low of $0.99005.

According to Bloomberg, so far Euro It reached its lowest price since 2022, when the currency entered physical circulation. But what is the reason for this collapse?

Why is the euro falling?

This fall in the European currency comes amid fears of a recession caused by the energy crisis in Europe due to uncertainty about future Russian gas supplies.

It also states that there are expectations that Eurozone experience a recession in the second half of the year and high inflation rates of up to 10 percent driven by energy costs and other factors.

In its monthly report for August, the German Central Bank (Bundesbank) also predicts a likely contraction that could even lead to a recession in the eurozone in the first quarter of 2023.

In addition, this collapse of the European currency is also associated with expectations that in USA interest rates are rising more than in the euro area.

At the moment, Reuters indicates that the market is waiting for the annual Federal Reserve Symposium in Jackson Hole, Wyoming, which begins on Thursday and which will be attended by US Federal Reserve President Jerome Powell.

As noted, markets According to monetary authorities, next month the US central bank will raise rates by 50 basis points, while some operators suggest that an increase of more than 75 basis points is possible.