Financial experts warn of high levels of uncertainty on the markets: Euro losses are increasing.

Financial experts warn of high levels of uncertainty on the markets: Euro losses are increasing.

There is currently a high level of uncertainty on the financial markets, which is leading to significant losses for the euro. According to traders, the conflict in the Middle East is primarily a reason for the strengthened dollar. Despite better than expected economic data from Germany, the common currency was unable to stabilize. Although the Ifo business climate improved in October for the first time in six months, demand for machines and equipment worldwide is too low. German companies are hoping for better times next year. However, according to Ulrich Kater, chief economist at Dekabank, the economic situation is not yet good again. The strong dependence on China and the increasing competition among Chinese companies in German industry's export domains are particularly problematic.

The European Central Bank set the reference rate for the euro at $1.0576. This is a further decrease compared to the previous day. The ECB also set the reference rates for one euro at 0.87240 British pounds, 158.55 Japanese yen and 0.9474 Swiss francs. The price of gold rose to $1,977 per troy ounce.

Current developments on the foreign exchange market have an impact on the market and the financial industry. Due to the weak euro, export companies in Europe can benefit from lower prices and increase their competitiveness. On the other hand, import-dependent companies suffer from rising costs and higher prices for imported goods. Another impact is that travel to the US will become more expensive for European tourists as they receive fewer US dollars for one euro.

The current uncertainty in financial markets may lead to increased volatility as traders reassess their positions and react to possible risks. Investors could increasingly rely on safer forms of investment such as gold or Swiss francs. Demand for machinery and equipment could continue to weaken as backlogs of orders shrink and dependence on China increases.

Overall, the current situation on the financial markets is characterized by high uncertainty and a strengthening of the US dollar. The effects on the market and the financial sector are diverse and affect both export and import companies. The development of uncertainty and the strengthening of the US dollar should therefore continue to be closely monitored.

According to a report by www.t-online.de, October 15, 2020.