DAX is bobbing along, the euro is falling

The announcement of partial mobilization in Russia also unsettled investors on the German stock exchange. After the Russian President’s announcement, the mood on the Frankfurt floor cooled noticeably. The DAX initially lost well over one percent. In the course of the day, however, he was able to largely make up for his loss and is currently trading in the black.

In the evening, the US Federal Reserve announced its latest interest rate decision. A further significant increase in the key interest rate in the USA is expected. According to information from Handelsblatt Experts are expecting an increase of 75 basis points, but traders also believe that an interest rate step of more than one percent is possible. The FED is driven by inflation concerns. Although inflation in the USA has fallen slightly, at 8.3 percent it is still well above expectations.

The prospect of a hefty increase in the base rate for the US dollar in return is accompanied by a further decline in the euro, which has now fallen below par again with the US dollar and is also becoming increasingly marginalized against the Swiss franc. Investors are moving to the somewhat “safer haven” US dollar, especially since risks in the euro zone have increased further given the partial Russian mobilization and the escalation of the conflict in Ukraine. Added to this is the bleak macroeconomic outlook for Europe. Experts are now certain that the largest economy in the EU will slip into recession. In all likelihood, the “gas surcharge” will be scrapped, since the largest German gas importer, Uniper, is to be nationalized. Economically, it is increasingly about survival in Germany. The continuous decline of the DAX also shows the corresponding tendency for this. It has lost over 17 percent over the past year – and there is no sign of a turnaround.

more on the subject – After Putin ordered partial mobilization: Oil and gas prices are rising again significantly

Source: RT

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J. A. Allen

Author, blogger, freelance writer. Hater of spiders. Drinker of wine. Mother of hellions.

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