Euro Counterattacks, Dollar Depreciates Sharply, May Break 100
As early as when the United States first began to impose sanctions on Russia, we had already pointed out in our articles that the target of the United States' harvest was not Russia, but Europe.
But now it seems that the United States' layout has failed, and Europe has also begun to counterattack.
The euro continues to rise, and the US dollar is suppressed, which may quickly break through the 100 mark. This will directly lead to a decrease in the purchasing power of the US dollar, and also affect the status of US debt.
Helplessly, the Federal Reserve may have to change its plan as soon as possible.
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The United States deliberately triggered the energy crisis in Europe, transferring inflation to Europe, but now it seems that Europe has finally survived.
Now, the natural gas price in Europe has returned to a normal level, and the recent trend of natural gas price decline is in sharp contrast to last summer.
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At that time, due to Russia's reduction of natural gas exports to Europe, the natural gas price in Europe soared to more than ten times the usual, so Europe had to buy natural gas from the United States. The United States made a lot of money for this.
Now, Europe has accumulated a large amount of natural gas inventory, and the demand for natural gas in Europe is expected to remain weak in the next period.
For the European economy, the biggest hidden danger has been eliminated.Although the pace of recovery from the energy crisis varies across different regions in Europe, the overall situation is relatively clear. However, the situation in the United States is not as optimistic.
American media have already issued a warning that the global economic development is closely related to the United States. If everyone blindly sells off, it is very likely to affect the global economy.
The American media further analyzed that other countries holding U.S. debt will inevitably be affected, just like the subprime mortgage crisis that erupted in the United States in 2008, which allowed the global economy to gradually improve around 2020.
To achieve vigorous global economic development, a stable development background is necessary. In other words, everyone should stop selling U.S. debt.
If U.S. debt collapses completely, the U.S. dollar will inevitably be affected, and other countries will also find it difficult to avoid the disaster.
The American media's words are more of a warning and a threat than a reminder. They constantly emphasize the shared weal and woe between the United States and other countries, trying to indirectly stop other countries from selling U.S. debt.
On the contrary, the counterattack triggered by the euro is very powerful.
In the past period, the euro has been continuously suppressed by the U.S. dollar and has fallen. At its lowest point, it was even lower than the exchange rate of 1:1.In the past six months, the euro exchange rate has been continuously rebounding. Although there have been fluctuations, it has now returned to the vicinity of 1.1.
With the change in the Federal Reserve's attitude, the US dollar may continue to decline, and the euro may continue to rise for some time in the future.
This is because the current critical situation in the United States has forced the Federal Reserve to make the latest statement. Powell indicated that the Federal Reserve is likely to pause interest rate hikes.
He stated that the pressure of bank bankruptcies would affect the Federal Reserve's interest rates. If the credit environment tightens due to the banking crisis, leading to an economic slowdown, the Federal Reserve would not raise interest rates back to their original levels.
The current situation has changed, and the risk of raising interest rates too much or too little has become balanced, instead of being like before, where the risk of raising interest rates too high was less than the risk of raising interest rates too low. Therefore, it is highly likely that the Federal Reserve will stop raising interest rates next month.
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