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Euro plunges to three-year low as coronavirus threatens to PARALYSE global economy | City & Business | Finance

Euro plunges to three-year low as coronavirus threatens to PARALYSE global economy | City & Business | Finance 46

In volatile trading the euro fell 1.6 percent to $1.0726 per dollar, its lowest since April 2017, as traders rushed to dump euro positions over coronavirus fears. The fall was despite a fresh round of stimulus from the European Central Bank who announced a €750 billion ($817 billion) asset-purchase programme in response to the coronavirus outbreak, which threatens to paralyse swathes of the global economy.

Meanwhile, the pound sterling teetered near its lowest point since at least 1985, while the Australian dollar tumbled to a 17-year low and the New Zealand dollar was at its weakest in 11 years as investors dumped riskier assets.

The euro’s plunge boosted the dollar’s value against a basket of its peers.

Ulrich Leuchtmann, head of FX and commodity research, said: “There are still fears about refinancing of European debt in US dollars.

“The swap facilities should normally give access to euro funding. But I think this is not calming down the market.

“There’s a general assumption that there are a lot of US funding needs, not just in Europe but also around the world as a whole.”

Manuel Oliveri, a currency strategist at Credit Agricole in London, added: “Central banks are stepping up their liquidity actions but it is not enough to make sure the dollar scarcity disappears, and as a result the dollar continues to be the favoured currency across the board.

READ MORE:Pound to euro exchange rate: GBP crashes to lowest rate in a decade 

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