FT News Briefing Euro drama in currency markets
Nov 19, 2021
The podcast dives into the euro's decline against the dollar and its potential inflationary effects. It explores how car giants Ford and GM are teaming up with semiconductor manufacturers to tackle chip shortages. Further, discussions include Turkey's recent interest rate cuts and the resulting volatility of the lira amid economic turmoil. Political uncertainty looms as the country approaches elections, with investors weighing their options in the complex landscape.
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Euro Decline
- The euro is falling against the US dollar, hitting a 16-month low.
- This is due to the European Central Bank's (ECB) reluctance to raise interest rates, unlike the Federal Reserve and the Bank of England.
Euro and Inflation
- A falling euro benefits exporters but can worsen inflation.
- ECB President Christine Lagarde prioritizes the eurozone's stability over market reactions.
Turkish Lira Crisis
- Turkey cut interest rates again to 15%, despite 20% inflation.
- The lira plummeted 4% in response, hitting a record low against the dollar.