Back to the doldrums for the euro as it nears parity

The euro is at the lows of the day at 1.0002 after reaching as high as 1.0187 today. It has been solidly higher until the US dollar US Dollar The US dollar, (symbol $, code USD) is the fiat currency of the United States of America (USD) and the most widely traded currency globally. It was introduced into the US in the late 18th Century, with paper notes not being distributed until the following century. The US dollar, also informally known as the greenback, is the world’s most foremost reserve currency, due in large part to the importance of the US economy on the world stage. Once backed by gold (in the 1900’s), the USD is now a purel The US dollar, (symbol $, code USD) is the fiat currency of the United States of America (USD) and the most widely traded currency globally. It was introduced into the US in the late 18th Century, with paper notes not being distributed until the following century. The US dollar, also informally known as the greenback, is the world’s most foremost reserve currency, due in large part to the importance of the US economy on the world stage. Once backed by gold (in the 1900’s), the USD is now a purel Read this Term surged across the board on high inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term data.

A fall below parity could trip fresh stops and put the September low of 0.9864 back on the table.

Recent signs of a thawing in European energy prices and a plan to shield consumers and businesses has led to a bounce in the euro but further rate hikes would endager the economy next year.

For now this is a classic flight to safety. The market pricing in anothe 25 bps of hiking doesn't really change the picture but there's a growing risk the Fed will have to tighten the US economy into recession.

Closing changes for the main bourses in Europe:

• Stoxx 600 -1.5%
• German DAX -1.5%
• UK FTSE 100 -1.1%
• Italy MIB -1.1%
• French CAC -1.3%
• Spain IBEX -1.5%

European stocks fell alongside American counterparts after the hot CPI reading. That erased what had been a decent start to the day.