Given this scenario, first, we must understand the reason for this parity. There is a strong depreciation of the euro since last year, accentuated by the war between Ukraine and Russia. Undoubtedly, this event generates uncertainty and fear in investors, who thus decide to take refuge on the other side of the world in currencies such as the dollar. On the other hand, we must contemplate the global inflationary panorama, which has generated the response of the central banks and, as a consequence, the strengthening of other currencies.
This, added to the fact that last month the Federal Reserve of the United States raised the interest rate by 75 basis points, which generated a strengthening of the dollar against other currencies. Data of investing.com They point out that the dollar advances 11.37% so far in 2022 against currencies such as the yen, the pound sterling, the Swedish crown, the Swiss franc and of course the euro.
On the contrary, the European Central Bank has remained inactive in this regard, and the rest of the markets are waiting for the body to make a monetary decision that will help contain the fall of the euro.
Given this, the recommendation is not to focus all attention on the strengthening of the dollar when investing, but to pay attention to the behavior of its counterpart. In this way, for example, it can be foreseen that the weakening of the euro will continue, which makes this currency an unviable option to continue diversifying the investments of those who decide to do so in currencies.