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Euro to Dollar Rate’s Recovery Delayed but Not Necessarily Derailed

 

“The clock is ticking and as I mentioned the longer that inflation remains well above target, the greater the concern that the public will start to just naturally incorporate higher inflation into its economic decision making and our job is to make sure that doesn’t happen,” Fed Chairman Jerome Powell.

 

Commerzbank HQ looms over the Frankfurt skyline. Image © Andre Douque, reproduced under CC licensing conditions

The Euro to Dollar rate sustained heavy losses after sharp increases in some U.S. inflation rates took the market by surprise but its earlier recovery from two-decade lows may have been merely delayed, rather than derailed, and in part because of the evolving Federal Reserve (Fed) policy outlook. 

Europe’s single currency fell more than one percent against the Dollar and was closing in on the parity threshold again on Tuesday, marking a more-than 50% reversal of the recovery that had began the prior Tuesday…

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