The euro fell by 0.3% on Wednesday to $1.1205, which is its lowest level since July 2020. This comes after the release of a survey that showed the steep decline of business morale in Germany during the month of November.
With supply chain and manufacturing bottlenecks as well as a spike in COVID cases impacting the country, Germany has entered into its fifth consecutive month of declining business sentiment. According to figures released by the Ifo Institute, Germany’s business climate index fell from 97.7 in October to 96.5 in November.
Turkey is also engaged in its own economic crisis as of late, with President Tayyip Erdogan defending rate cuts as the country experiences skyrocketing inflation rates. The Turkish lira is now hovering above its all-time low of $13.45 after falling by approximately 15%. To date, the lira has slumped to record lows in 11 consecutive sessions.
Moritz Paysen, an FX trader at Berenberg, gave his reflection on the matter, explaining that he finds Erdogan’s response to the ongoing situation to be peculiar: “After several changes of personnel in the central bank, Recep Erdogan has now found a central bank chief who obeys and lowers interest rates as desired. Given the high inflation of over 20%, this approach is somewhat unorthodox,” Paysen explained.
