New York, Sept. 21, 2022 (GLOBE NEWSWIRE) -- For the first time since 2002, the euro has hit a one-to-one exchange rate with the U.S. dollar. This parity comes at a time when there is much speculation about whether the U.S. and the Eurozone could enter a period of recession, as both face high inflation.
Stock trading expert Lance Abrams discussed what this parity indicates for the U.S. and EU economies, as well as the global economy. In regard to the question of whether the dollar is rising or the euro is falling, Abrams asserts that both are happening concurrently.
Supply chains in Europe and across the globe have been upended by both the pandemic, and more recently, the war in Ukraine. The eurozone has relied heavily on oil and natural gas imports from Russia, so trade restrictions are causing major price hikes in the energy sector. Despite fears about the stability of the U.S. economy, the Federal Reserve has been combating inflation by raising interest rates. Higher interest rates prop up the value of the dollar. However, the European Central Bank (ECB) also intends to raise interest rates to strengthen the euro.
Abrams predicted that it could go even further. If the U.S. continues to raise interest rates while the EU, on the other hand, faces economic slowdown, the value of the dollar could surpass the value of the euro.
“If you’re an American who has been planning a trip to Europe, now might be a good time.” said Abrams.
Abrams also mentioned that gold trading expert Mikhail Peleg predicted this parity when the two last spoke during an online seminar on cryptocurrency vs gold. Peleg observed the high inflation being experienced in both the US and the EU and anticipated that the US would likely react by increasing interest rates.
The Federal Reserve implements interest hikes more readily than the ECB. This causes an undervalued exchange rate between the Euro and the Dollar, according to Mikhail Peleg.
When asked about the future for the US dollar, Abrams said that it is likely to retain its value because many countries invest in US dollars as it has historically been a stable asset. The dollar is one of the most dominant currencies in the global economy. The European and US economies are mutually invested in each other as foreign trade partners. Cooperating to retain stability is a top priority for the Fed and the ECB.
About Lance Abrams:
Lance Abrams is an independent stock trading expert who is renowned for his unique ability to read the market. With his extensive track record and experience gained over 40 years trading in financial and commodity markets, Abrams serves as a consultant and advisor to many international hedge fund managers, bullion banks, directors, and metal traders globally.
