A seismic shift in Europe .. the dollar is close to parity with the euro for the first time in two decades
Shafaq News/ The value of the US dollar has risen so much that it has become almost equal to the value of the euro for the first time in 20 years.
The Associated Press reported that the US dollar index, which measures the value of the US currency against six major foreign currencies, has jumped nearly 12 percent this year and reached its highest level in two decades. The euro is currently valued at just under $1.02.
Agency indicated; He indicated that the value of the dollar rose mainly because the Federal Reserve raised interest rates more than the central banks in other countries, in an attempt to reduce inflation rates, which reached levels unprecedented in 40 years.
The interest rate hike caused US Treasury yields to rise, attracting investors looking for more returns than they could get anywhere else in the world.
The agency says this increased demand for dollar-denominated securities has boosted the value of the dollar.
Also contributing to the rise in the value of the dollar, according to the chief economist at High Frequency Economics, Rubella Farooqui, is that despite concerns about a possible recession in the United States, “the US economy is in a stronger position compared to Europe.”
This year, the value of the euro has fallen largely due to growing fears that the 19 countries that use this currency will plunge into recession.
The war in Ukraine has inflated oil and gas prices, negatively affecting European consumers and businesses alike.
In particular, Russia’s recent cut in natural gas supplies to Europe has sent prices skyrocketing and raised fears of a blackout that could force governments to ration power to factories in order to avoid the crisis’s impact on homes, schools and hospitals.
Robin Brooks, chief economist at the International Banking Group’s Institute for Trade Finance, wrote on Twitter this week that the war in Ukraine dealt a “physical blow to Europe, undermining Germany’s growth model that relies on cheap Russian energy.”
“Europe is facing a seismic shift, which means the euro needs to fall to reflect that,” he added.
Slower European growth may eventually give the European Central Bank less time to raise interest rates and adjust economic growth to tackle its own inflation problem.
The European Central Bank announced that it will raise its key interest rate by a quarter point when it meets later this month, and possibly by as much as half a point in September.
Analysts pointed out that there is another factor that boosted the demand for the dollar, which is its importance as a globally recognized safe haven, in light of the recent turmoil in financial markets.
Eid al-Adha in Iraq: the atmosphere is shy
A commercial stagnation in the markets as a result of the difficult economic conditions and crises that burden the citizen.
The atmosphere of this holiday is different in Iraq from the above due to the clear commercial stagnation in the markets and the movement of shopping, as a result of the difficult economic conditions that the country experienced in the previous period.
Shy is the atmosphere of Eid with alleys and streets in Iraq despite the families’ adherence to the appearances of the feast and its inherited preparations, the harsh conditions that passed on the Iraqis stole their joy this year, as darkness dominated a large number of areas due to electricity cuts, while the scarcity of drinking water and the spread of epidemics made matters worse.
All this coincides with the high temperatures, which reached half a boiling point, in addition to the economic crises and political differences that made citizens anxiously await their day.
In the midst of the crowds of shoppers, but it witnessed a decrease these days by more than 40 percent over the previous holidays, according to traders who revealed that the weakness in the sales movement included all sectors, most notably clothes, foodstuffs, children’s toys and other sectors, noting that the shop owners were relying a lot on the ten days. That preceded Eid al-Adha, may it revive the market, but their shops remained almost empty of shoppers
Economists say that this holiday came with the flavor of stagnation and inflation, due to the high rates of poverty, which reached, according to estimates, thirty percent, meaning that more than ten million Iraqis live below the poverty line and suffer from low income due to difficult conditions as a result of the economy being affected by the repercussions of Corona and the Russian-Ukrainian war and what accompanied it. Worldwide food price hike.
Including Iraq.. The increase in the number of countries in need of food security assistance
The Food and Agriculture Organization (FAO) announced today, Monday, the increase in the number of countries that need external assistance for food, indicating that the high food prices and the lack of local commodities have exacerbated the conditions of food insecurity in the world.
The Rome-based organization said, in its report for the month of July 2022, which was seen by Shafak News Agency, that “the global price index for food commodities recorded a slight decline during the month of June as a result of the decline in international prices of vegetable oils, grains and sugar, in contrast to the increase in dairy and meat prices.”
She added that “the wars and local conflicts have exacerbated the conditions of food insecurity in many parts of the world, and Ukraine, where the war led to a large number of displaced people, and Sri Lanka, which is witnessing a complex crisis that led to high prices and a severe shortage of basic products, have joined the list”, indicating that “46 countries in the world, including 33 African countries, 10 Asian countries, 2 in South America and one country in Europe, need foreign aid for food.”
The organization indicated that “the Asian countries that need foreign food aid are Iraq, Pakistan, Afghanistan, Bangladesh, Yemen, Syria, Lebanon, Myanmar, North Korea and Sri Lanka.”
Source: Dinar Recaps
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