Wall Street and European stock markets trade sharply lower as the euro and pound fall to record lows against the dollar

Traders working on the London Stock Exchange (REUTERS/Simon Dawson/File)

European stock markets opened lower on Fridaywith tech stocks leading the declines after the US Federal Reserve pushed through another major rate hike and signaled more hikes in its battle against ongoing inflation.

At the same time, the pound sterling falls 1.5% to 1.10 per dollar, while the euro trades below 0.98 cents against the US currency, in both cases historic lows.

In Wall Streetthe open is also negative, down -1.38% in the Nasdaq and S&P 500 indices, while the Dow Jones confirms its decline below 30,000 points with a red of -1.2% in the first minutes of trading on the New York parquet.

Dollar gains strength against British pound (REUTERS/Dado Ruvic/Illustration/File)
Dollar gains strength against British pound (REUTERS/Dado Ruvic/Illustration/File)

The pan-European index STOXX 600 fell 2.20% at 12:30 GMT, while the German DAX 2.15% lost. Interest-rate sensitive European technology stocks fell about 2.5%.

The Federal Reserve raised interest rates by 75 basis points for the third time in a row on Wednesday. and sees its target rate at its highest level since 2008 and will rise to 4.25%-4.50% later this year.

Isabel Schnabela member of the Governing Council of the European Central Bank stated that interest rates they should keep risingas inflation remains too high, even though the euro area is facing an economic downturn.

the London index FTSE 100 fell 1.9%, the Eurostoxx 50, which includes the 50 largest companies in the eurozone, fell by 2.10%; the CAC 40 on the Paris stock exchange lost 1.87%; and the IBEX 35of the Spanish stock market, fell by 2.32%.

The Federal Reserve Building in Washington (REUTERS/Leah Millis/File)
The Federal Reserve Building in Washington (REUTERS/Leah Millis/File)

The Federal Reserve’s Decision

After a two-day meeting, members of the Fed’s Federal Open Market Committee made the decision to raise interest rates, which was justified by the Reserve’s president, Jerome Powellat a press conference.

The economist said the central banking authorities “determined” to bring inflation back from its highest level in four decades and “they will keep doing it until the job is done”.

Powell assured agency officials see the need to raise the reference rate to a “restrictive level” and “keep it there for a while”. “We are determined to bring inflation down to 2%,” he said.

In this sense, he emphasized that the prospects of the so-called “to land soft heartedThe economy would likely decline if central bank officials believe monetary policy needs to be tightened further. restrictive or longer restrictive.

In this regard, he noted that it “very challengingand that his colleagues are unsure whether the monetary policy tightening process will lead to a recession or how deep any contraction could be.

Powell had already foreseen that there might be another one in September when he announced the previous increase in July.”increase unusually large‘ from the boys, a prediction he has confirmed in his latest public speeches.


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