Does the US dollar benefit from the escalation of the aggression against Gaza?
Experts believe that after the dollar achieved a remarkably positive performance in the markets, its rising potential is now limited, as it is possible that the US Central Bank has reached the end of the cycle of rising interest rates after it became clear that the dollar can no longer expect any support from monetary policy, at least. , amid increasing signs that interest rates have reached their peak.
In this context, the German “ARD” news network quoted Commerzbank foreign exchange expert Ante Braivke as saying, on Monday evening, that the reasons for the rise in the euro’s exchange rate are currently primarily due to the weakness of the dollar.
The expert is likely to decide whether the euro will be able to continue to rise against the dollar depending on the development of the security situation in the Middle East, and whether the Israeli war on Gaza will escalate in the coming weeks, amid fear that it will spread to other countries in the region, and then demand will rise. Once again, there are “safe havens”, led by the US dollar, which will benefit first and suddenly return to the rise.
Technically, there is a lot that can be said at the present time about the decline of the US currency, after the dollar index broke its upward trend, noting that the index calculates the value of the dollar against a basket of 6 major currencies in the world.
All of this will make the euro benefit more, according to the expert, who sees an opportunity for the dollar now to achieve additional increases after a decline at the beginning of last October.
In his opinion, this will serve eurozone citizens who seek to travel abroad, as well as companies that obtain goods and raw materials from countries other than the eurozone.
Accordingly, the risks related to further appreciation of the European currency have never disappeared, especially since there were somewhat cautious signs from an economic standpoint, especially in Germany, which has the largest economy in Europe, amid expectations that its economy will contract slightly in the last quarter of the year. 2023, after the gross domestic product had declined in the third quarter, and there are fears of falling into the clutches of recession.
Economist Daniel Hartmann had said in a previous statement to the German network that the Gaza war poses a major challenge to financial markets, and in the long run it will take a different direction. This war constitutes another example of the United States increasingly losing its influence, and this also creates consequences for the dollar, its currency. The first reserve in the world, and he mentioned in his speech that countries such as China, India, Russia and Brazil are increasingly trying to separate themselves from the American currency.
2023-11-07 13:21:59
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