EURUSD Continues Its Demise, Stocks Weaken
23 August 2022
As Wall Street's major indexes began sharply down on Monday during American trading hours, the dollar's rise gained momentum
Investors are becoming more worried about a worldwide recession. In response to Fed members' statements last week, they may be preparing for hawkish remarks at the Jackson Hole Symposium later this week.
As a result, the EURUSD pair fell to fresh 20-year lows near 0.99, GBPUSD declined to 30-month lows below 1.18, and USDJPY advanced above 137.
Sentiment remains negative in the stock markets as well, leading to some notable declines in both EU and US indices.
In recent economic news, experts at Citi increased their predictions for the UK's inflation peak to 18% as a result of the extra 25% increase in gas prices and the 7% increase in electricity prices during the last week.
EU collapse nears
Germany, the largest economy in the Eurozone, is increasingly likely to experience a recession, according to the Bundesbank's monthly report released on Monday.
The central bank noted that "winter economic production contraction has become far more likely." The high level of supply uncertainty this winter and the considerable price rises "are expected to have a significant impact on individuals and businesses."
With this in mind, the Eurozone flash PMIs will be eagerly monitored later in the afternoon amid forecasts the August statistics would indicate another month of business contraction following the July decline in the final composite PMI index to a 17-month low.
Additionally, the PMI data will be due from the US expected to decline slightly. After that, new home sales are on the agenda, projected to drop month-on-month.