The euro fell below the $1.10 mark for the first time in almost two years today, hitting a seven-year low against the Swiss franc.
The euro fell 0.8% today to $1.0967, its lowest level since May 2020, and weakened 0.8% against the Swiss franc to 1.0066, its lowest level since January 2015.
The invasion of Russian troops in Ukraine is now entering its second week. According to experts, the troops continue to advance in the southern regions of Ukraine, while Ukrainian soldiers continue to hold out in the northern regions. Several countries in Europe, as well as the United States, have already imposed sanctions on Russia. If Russian exports to the world market are affected by the sanctions, the European economy is likely to suffer a severe blow. This could prompt the ECB to continue its ultra-loose monetary policy.
At the same time, the euro is also under pressure, as the European Central Bank (ECB) is not expected to raise its key interest rate. In contrast, U.S. Federal Reserve Chairman Jerome Powell this week announced the first small rate hike in March. This rate hike will likely be far below analysts’ expectations, who would have liked to see a 0.5% hike, but will likely only see 0.25%.