The euro is expected to continue its decline against the US dollar after plunging below parity, said the Institute of International Finance.
The single currency, which came into physical circulation in 2002, fell to below parity against the greenback on August 22 and to a low of $0.9910 the next day. It ended trading on Friday at 0.9957.
The euro first fell to below parity in July and has continued to trade below or near parity for the past two weeks. It has dropped more than 12 per cent against the dollar this year, dragged down by historically high inflation and low consumer confidence.
Annual inflation in the euro area reached 9.1 per cent last month, from 8.9 per cent in July, a record high, as energy costs remain elevated and food prices continue to accelerate, according to flash figures from Europe’s statistics office Eurostat.
Energy recorded the highest annual inflation rate at 38.3 per cent while food, alcohol and tobacco were up 10.6 per cent.
Inflation is a major concern for the European Central Bank, which increased interest rates by 50 basis points to zero on July 21 — its first rate increase in 11 years. The ECB is expected to increase rates by a similar or greater amount on September 8.
“Markets are increasingly focused on recession, however, and we think — if the ECB does choose to hike 75 bps in September — they may look through ECB tightening and switch to pricing policy rate cuts further out, much as they have been doing for the Fed,” the IIF said.
“As a result, it is unlikely that ECB hiking will prevent the euro from falling further, not least since speculative positioning remains close to flat for the single currency. The euro is therefore likely to keep falling.”
The ECB is behind the inflation curve and playing catch up, critics said as they cited weak economic indicators.
On Thursday, the latest data showed that Germany's manufacturing sector remained in contraction territory in August, with the S&P Global/BME purchasing manager's index falling to 49.1, from 49.3 in July, due to a decline in factory activity in Europe's biggest economy caused by a sharp decline in new orders.
European surveys offer “little hope that the bloc will avoid a recession later this year”, said Craig Erlam, a senior market analyst at Oanda.
“And that is before winter even starts and energy bills go through the roof. It is going to be a long, hard six months for Europe and it can't rely on the ECB to provide any relief — quite the opposite actually.”
The eurozone area is unlikely to avoid a recession, given the deterioration in economic indicators, with growth estimated at 1 per cent in 2022, the IIF said.
It said the sharp deterioration in the eurozone trade balance reflected the immediate hit from the large rise in energy prices, and that the bloc's reliance on cheap Russian energy required “a retooling of the eurozone growth model, [which] will take time and weigh on growth in coming years”.
Brief scores:
Toss: Sindhis, elected to field first
Kerala Knights 103-7 (10 ov)
Parnell 59 not out; Tambe 5-15
Sindhis 104-1 (7.4 ov)
Watson 50 not out, Devcich 49
MATCH INFO
Uefa Champioons League semi-final:
First leg: Liverpool 5 Roma 2
Second leg: Wednesday, May 2, Stadio Olimpico, Rome
TV: BeIN Sports, 10.45pm (UAE)
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
Company%20profile
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MOUNTAINHEAD REVIEW
Starring: Ramy Youssef, Steve Carell, Jason Schwartzman
Director: Jesse Armstrong
Rating: 3.5/5
Results
Stage seven
1. Tadej Pogacar (SLO) UAE Team Emirates, in 3:20:24
2. Adam Yates (GBR) Ineos Grenadiers, at 1s
3. Pello Bilbao (ESP) Bahrain-Victorious, at 5s
General Classification
1. Tadej Pogacar (SLO) UAE Team Emirates, in 25:38:16
2. Adam Yates (GBR) Ineos Grenadiers, at 22s
3. Pello Bilbao (ESP) Bahrain-Victorious, at 48s
ABU%20DHABI'S%20KEY%20TOURISM%20GOALS%3A%20BY%20THE%20NUMBERS
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Destroyer
Director: Karyn Kusama
Cast: Nicole Kidman, Toby Kebbell, Sebastian Stan
Rating: 3/5
UAE release: January 31
MATCH INFO
Uefa Champions League semi-final, first leg
Bayern Munich v Real Madrid
When: April 25, 10.45pm kick-off (UAE)
Where: Allianz Arena, Munich
Live: BeIN Sports HD
Second leg: May 1, Santiago Bernabeu, Madrid
How being social media savvy can improve your well being
Next time when procastinating online remember that you can save thousands on paying for a personal trainer and a gym membership simply by watching YouTube videos and keeping up with the latest health tips and trends.
As social media apps are becoming more and more consumed by health experts and nutritionists who are using it to awareness and encourage patients to engage in physical activity.
Elizabeth Watson, a personal trainer from Stay Fit gym in Abu Dhabi suggests that “individuals can use social media as a means of keeping fit, there are a lot of great exercises you can do and train from experts at home just by watching videos on YouTube”.
Norlyn Torrena, a clinical nutritionist from Burjeel Hospital advises her clients to be more technologically active “most of my clients are so engaged with their phones that I advise them to download applications that offer health related services”.
Torrena said that “most people believe that dieting and keeping fit is boring”.
However, by using social media apps keeping fit means that people are “modern and are kept up to date with the latest heath tips and trends”.
“It can be a guide to a healthy lifestyle and exercise if used in the correct way, so I really encourage my clients to download health applications” said Mrs Torrena.
People can also connect with each other and exchange “tips and notes, it’s extremely healthy and fun”.
Essentials
The flights
Emirates and Etihad fly direct from the UAE to Los Angeles, from Dh4,975 return, including taxes. The flight time is 16 hours. Alaska Airlines, United Airlines, Delta Air Lines, Aeromexico and Southwest all fly direct from Los Angeles to San Jose del Cabo from Dh1,243 return, including taxes. The flight time is two-and-a-half hours.
The trip
Lindblad Expeditions National Geographic’s eight-day Whales Wilderness itinerary costs from US$6,190 (Dh22,736) per person, twin share, including meals, accommodation and excursions, with departures in March and April 2018.
