Risk-sensitive Australian and New Zealand dollars also fell sharply, and the safe-haven currency yen rose.
In the Asian morning session, the euro fell by 1 .65,438+05% to1euro to1.65,438+0.40 USD, which is expected to be the biggest one-day drop in the past two years.
The exchange rate of the ruble against the US dollar once fell to 104 ruble against 1 US dollar, with a drop of more than 19%.
The Australian dollar fell 0.98% against the US dollar to 0.71625; NZD fell 1. 10% to 0.66630.
The yen rose 0.36% against the US dollar to 1 15.06.
It is unlikely that the European Central Bank will raise interest rates or fall below the 1. 10 mark. As an opponent of the dollar, the trend of the euro is often negatively correlated with the dollar index. 202 1 euro fell by nearly 6%, and the process of raising interest rates by the European Central Bank is still far away, so the euro is generally bearish in 2022.
However, the latest data shows that inflation in the euro zone unexpectedly reached a record 5% in June 5438+February, which may make the European Central Bank on pins and needles.
However, Lien, chief economist of the European Central Bank, reiterated that these driving factors are temporary, and 2020-2022 is part of the "inflation epidemic cycle" and should not be compared with the historical norm. He also said that inflation data will decline this year.
Despite the strong economic growth, it is expected that inflation in the euro zone will fall below the target of 2% in 2023 and remain at that level in 2024, but some members of the management Committee have begun to warn against ignoring the upward risks. European Central Bank President Lagarde said that the possibility of raising interest rates in 2022 is still extremely low, but at the same time pointed out that if consumer prices rise more than expected, she may change her mind.
According to Bloomberg's economic research, the European Central Bank is caught between price shock and slow recovery. However, the weak labor market will limit the potential price pressure, and the current high inflation will be temporary. This should allow the CMC to continue buying bonds until the third quarter.
ING predicts that the currency pair will fall below the range of1.180-1.1380 in the first half of 2022, and the market will begin to pay attention to the first interest rate hike by the European Central Bank in the second half of 2022, and the euro may fall to1.08 in the first half of 2022.
This article was edited in March 2022-1 1.