Global stocks were down on Tuesday as the euro dove to a new two-decade low against the dollar and traders waited nervously for news on the next US interest rate hikes. The single currency tumbled to $0.9901, but later clawed back losses as the greenback was hit by poor US economic data.
The dollar had strengthened this week against other currencies ahead of a speech Friday by US Federal Reserve chief Jerome Powell, as markets speculate that the central bank will continue tighten its monetary policy.
Higher interest rates boost the American currency as they make dollar-denominated debt more attractive to investors. But the euro also has been weighed down by a gloomy outlook for the eurozone economy as Russia’s war in Ukraine has sent energy prices soaring.
The unit plunged below parity with the dollar Monday on recession fears to plumb the lowest levels since 2002, when it first came into physical circulation. In the latest blow, S&P Global’s closely watched monthly composite purchasing managers’ index (PMI) showed that eurozone economic activity fell for the second month in a row in August. Wall Street indices ended mostly lower, with the Dow Jones falling 0.5 percent.
European equities and Asian markets also slid amid stubborn worries about the Fed’s movements. US natural gas prices meanwhile hit a fresh 14-year high on Tuesday at $10.028.
Source: eNCA
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