The flagging economy in leading European countries, the speculation of forthcoming discrepancy of rate cuts by the ECB and the Federal Reserve and the threat of tariffs on European exports to the U.S. are believed to be among the overriding factors dragging on the value of euro.
FRANKFURT, Jan. 2 (Xinhua) -- The euro lost 0.7 percent of its value against the U.S. dollar on Thursday, hitting a two-year low in a depreciation streak since last September.
The reference exchange rate of euro against U.S. dollar fell to 1.0321, the lowest level since November 2022, according to figures published on the website of the European Central Bank.
The common currency rose to 1.1196 against U.S. dollar at the end of September, the highest level since February 2022, before it embarked on a losing streak which has been continuing so far.
The flagging economy in leading European countries, the speculation of forthcoming discrepancy of rate cuts by the ECB and the Federal Reserve and the threat of tariffs on European exports to the U.S. are believed to be among the overriding factors dragging on the value of euro.
The central bank of Germany predicted in December that the German economy will decline by 0.2 percent in 2024 after contracting for two consecutive years. The ECB said in December that the economic growth in the euro area was losing momentum.
As inflation in the euro area is edging down to the target level, market observers reckon the ECB may go on with rate cuts at paces faster than the Fed this year, weighing on the exchange rate between the euro and U.S. dollar. ■