The dollar remains weak - the euro shows strength

Published on: 20-Aug-2020
Category: Trading
Last updated: 20-Aug-2020

The dollar remains weak - the euro shows strength

The euro is getting stronger against the dollar and reached a new two-year high on Tuesday. After a euro had already cost 1.1966 dollars for a short time, the rate fell again to 1.1937 dollars and was further devalued to 1.1843 dollars on Thursday. However, these current developments show not only the strength of the euro, but rather the weakening of the dollar. An uncertain future is damaging the US currency, because the presidential election campaign, controversial corona aid and heightened tensions with China are not giving the economy and investors any security. In the EU, on the other hand, a financial aid package was agreed with the member states which symbolizes the cohesion during the crisis. But rising new infections from Covid-19 in the EU and stagnating case numbers in the USA can turn the tide again.

The Turkish currency is struggling with a much stronger decline in value. The lira is reaching new lows and Turkey is on the verge of a currency crisis. One dollar now costs 7.40 lira and one euro is worth 8.82 lira, more than ever before. The reasons for this are diverse. Inflation has reached a low double-digit value again, the key interest rate is 8.25 percent and no longer attracts foreign investors into the country. The Corona crisis ensures that hardly any tourists come to the country, which means that significantly less money flows into the country. In addition, there is a foreign policy that could lead to a military conflict with Greece in the Mediterranean. The dispute over gas reserves in the Mediterranean has been causing a tense mood for a long time.



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