FAST FIVE: "Parity Is Just A Matter Of Time Now": Euro Crashes To 20 Year Low As Recession Reality Trounces ECB Rate Hike Delusions

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*ECB SLASHES GDP FORECASTS, NOW PREDICTS 2.8% IN 2022 hiking into a slowdown and then recession – zerohedge (@zerohedge) June 9, 2022 Today, it finally appears that the market got the memo and sent the euro plunging crashing a 20-year low against the US dollar as traders bet that the European Central Bank will go slower on raising interest rates as the economy risks being tipped into a recession.

The artificially constructed common currency which was meant to keep German exports competitive, fell as much as 1.4% to $1.0281, its weakest level since December 2002.

Europe's slide into recession was accelerated by the latest Italian and Spanish composite PMIs which both declined in June, led by a deceleration in the services sector, and which Goldman said was “consistent with our view of a deceleration in the growth momentum across the Euro area going into H2.

“Parity is just a matter of time now,” said Neil Jones, head of FX sales to financial institutions at Mizuho.

The Fed in contrast has already raised rates by 150 basis points, with markets pricing in an 80% chance of a 75-basis-point hike at their July meeting; the US is also now widely expected to enter recession by late 2022 or early 2023 at the latest.

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