The euro fell slightly in the European market on Monday against a basket of global currencies, to abandon the highest level in 17 months against the US dollar, due to the activity of corrections and profit-taking.

In conjunction with investors' reluctance to take risks, after data showed that the Chinese economy grew less than expected during the second quarter of this year, which revived purchases of the US currency as a safe haven.

Euro exchange rate today

The euro fell against the dollar by 0.1% to $1.1214, from the opening price of trading at $1.1225, and recorded the highest level today at $1.1235.

The euro ended Friday's trading stable against the US dollar, after it recorded earlier in the trading the highest level in 17 months at $1.1245.

In terms of trading last week, the single European currency, the euro, rose by 2.4% against the US currency, the dollar, for the third consecutive weekly gain, and the largest weekly gain since November 2022.

This biggest weekly gain this year is attributed to the growing hopes about shrinking the currently narrow gap in interest rates between Europe and the United States.

interest rate gap

Comments from European Central Bank officials last week fueled speculation that the bank will raise European interest rates by 25 basis points during the July-September meetings.

On the other hand, the markets are highly likely that the Federal Reserve will raise interest rates by about 25 basis points later this month, the last increase in the cycle of raising US interest rates.

This means that the current expectations suggest, on a large scale, that the European Central Bank will implement additional increases in European interest rates, more than the increases currently expected from the Federal Reserve.

The interest rate gap between Europe and the United States is currently only 125 points, the lowest gap since May 2022, and is expected to decrease to only 100 basis points during next September.

Chinese economy

Data released today in Beijing showed that the Chinese economy grew at a rate of 6.3% during the second quarter of this year, less than market expectations of a growth rate of 7.1%, and the second largest economy in the world recorded a growth rate of 4.5% in the first quarter.

These data showed that the Chinese economy is still suffering from the repercussions of the Corona virus pandemic and the zero Covid policy implemented by the authorities to control the pandemic, and that the economy still needs more financial and monetary support in order for it to fully recover before the end of this year.

U.S. dollar

In light of investors' reluctance to take risks, the dollar index rose on Monday by 0.1%, to continue to recover from the lowest level in 15 months, which began during Friday's trading, reflecting the recovery of US currency levels against a basket of major and minor currencies.