Today, 1 euro = 1 dollar, for the first time in the past 20 years!

draw! The euro is "expensive" over the US dollar, and the general cognition of market players in the past 20 years is being subverted.

At about 17:00 on July 12, Beijing time, the euro hit the US dollar at a time and even fell below the parity (that is, 1 euro against 1 US dollars). Seeing this last time, it was dating back to December 2002.

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As of press time, the euro exchange rate against the US dollar

Analysts said that the euro fell to the US dollar to a parity, on the one hand, because of the Fed's radical interest rate hike strategy, the US dollar index continued to rise. On the other hand, the Russian -Ukraine conflict has seriously affected the economic prospects of the euro zone and thus suppressing the euro.

Since the beginning of this year, under the market's expectations of the Fed ’s accelerated interest rate hike, the US dollar index has continued to rise. On Tuesday, the US dollar index has been high to 108.55, a new high in November 2002. As of 16:00, the US dollar index was reported at 108.51.

Analysts believe that the strength of the US dollar is the direct cause of the euro's plunge in the US dollar. From a deeper point of view, the exchange rate of the euro to the US dollar is close to the price of Europe and the United States in terms of economic fundamental fundamentals, energy dependence, and monetary policy.

Zheng Houcheng, Director of the Institute of British Securities Research Institute, pointed out that the exchange rate of the euro to the US dollar is close to 1: 1. The most fundamental reason is that the macroeconomic fundamentals of the two economies of the United States and Europe have undergone a change in marginal changes in the United States, or in other words, or It has occurred in relative changes that are not conducive to the euro zone. The continuous existence of Russia and Ukraine's conflict is the main reason for the deterioration of macroeconomic fundamentals in the euro zone.

He believes that, on the one hand, in the context of Russia and Ukraine's conflict, the sanctions on the euro zone on Russia have caused the normal economic and trade exchanges between the two and reduced the efficiency of resource allocation. On the other hand Economic production and residents' lives have an impact, increasing the operating costs of the euro zone. "Both have formed a large degree of economic form of the euro zone economy."

In addition, Wang Youxin, a senior researcher at the Bank of China Research Institute, pointed out that after the global financial crisis in 2008, the overall economic recovery of the United States was better than the euro zone. The euro zone did not return to the level before the epidemic until the end of last year.

"As the economic recovery is unstable, the euro zone economy has been affected by risks such as geopolitical conflicts and natural gas offering for geopolitical conflicts this year. At present, economic stagflation pressure is greater than the United States." He said.

From the perspective of energy dependence, Wang Youxin pointed out that the United States has transformed into an exporter of energy to a certain extent. Energy autonomy is high, while the euro zone energy rely on imports, especially for Russia's energy dependence.

He further pointed out that in the context of high shortage of energy and price, the euro zone has continued to deteriorate trade revenue and expenditure for paying high energy import costs, and the industrial production capacity has been severely restricted. Since December last year The trade surplus has converted to a trade deficit, and the scale of the deficit is continuously expanded, which inhibit the euro trend.

Judging from the trend of monetary policy, Wang Youxin said that the euro zone and the United States are also facing strong inflation pressure, but the European Central Bank's actions are relatively slow and have not yet started interest rate hikes, but the Fed has raised 150 basis points this year. The difference continued to widen, and it also suppressed the euro trend.

Zheng Jiawei, chief analyst of Shanghai Securities' Fixed Even income, also believes that due to the influence of Russia and Ukraine's geopolitical conflict and rising commodity prices, the overall European economic prospects are worrying, so the overall trend of the euro to the US dollar is weak.

Looking forward to the future, Zheng Jiawei said that during the decline in the US economy, the US dollar index will still fluctuate at a high level, and the US dollar appreciation trend will continue to the Federal Reserve's interest rate hike point. In contrast, non -US currency will continue to undergo pressure.

Zheng Houcheng also believes that in the short term, the US dollar index is likely to be located in a high range, mainly based on the following four reasons. First of all, from the current situation, there are signs of countermeasures against Russia, which will increase the intensity of the Russian -Ukraine conflict and further benefit the macroeconomic economy in the euro zone. Secondly, the Russian conflict cannot be effectively resolved in the short term. The probability will destroy the investment environment of the euro zone, so that funds will flow out of the euro zone and enter the United States, and the Lido dollar index.

Third, although the European Central Bank is likely to raise interest rates in July, considering that the Federal Reserve will maintain a higher rate of interest rate hike in the short term, and the high probability of starting the process of shrinkage, which means that in general, the US monetary policy The degree of "eagle" is higher than the euro area and supports the US dollar index.

Fourth, the trend of global economic recession and even entering a depression will continue in the short term, and continuing Lido as the US dollar as the US dollar.

Wang Youxin also said that he looked at it in the short term. However, he reminded that with the increase in the risk of economic recession in the United States, the negative effects of economic fundamentals will gradually exceed the impact of monetary policy, and the US dollar exchange rate will fall.

Source: First Finance, Daily Economic News, Interface News

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