The dollar and the euro are showing strong growth. Why is the euro and dollar rising in 2014?

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

The Russian ruble is losing its positions, while the European and American currencies continue to grow. Some financial analysts have repeatedly warned about the fall of the ruble back in March 2014 - after the end of the Winter Olympics in Sochi. Other experts argued that the Olympic Games would boost and strengthen the Russian ruble.

To date, none of the predictions have been confirmed. But foreign currency continues to rise in price. Therefore, the question of why the euro and the dollar are growing this year is becoming more and more relevant.

Key Factors

The US currency is growing rapidly, not wanting to lag behind its main competitor - the euro. This growth is driven by two factors:

• oil prices moved into a horizontal corridor (“flat”);
• single European currency has taken a position of indefinite fall.

Oil has always played a key role in currency fluctuations. This year, Iran said it could close the Strait of Hormuz. This led to a sharp increase in quotations. And although a few days later the "American" fell sharply, on the third day the currency confidently rushed up.

The indefinite fall of the European currency contributes to the growth of the dollar. To find out the reasons for the growth of the euro and the dollar, you should pay attention to the actions of Germany. German politicians are trying to bargain for more cuts in government, social and economic spending from neighboring countries. This leads to financial uncertainty - the eurozone is constantly on the verge of default, which is skillfully balanced.

In addition, this year Russia expanded the boundaries of the currency corridor, due to which traders began to rapidly convert Russian rubles into dollars and euros.

Crimean conflict

The Russian ruble is losing ground due to the conflict in the Crimea and the increase on this basis of geopolitical risks. Russia's behavior explains why the euro and dollar are rising against the Russian ruble.

March 1, 2014 The Federation Council allowed Russian troops to enter Ukraine. The stock markets responded with a sharp fall of the ruble against the European and American currencies.

Not so long ago, the Central Bank's rate increased in Russia. The Deputy Minister of Economic Development of the Russian Federation assures that such actions are being taken by the state in order to contain the rapid fall of the Russian ruble. However, no one has yet commented on how such an increase will affect the country's economic growth.

What is driving the dollar and euro up?

To understand why the euro and the dollar are growing in January 2014, one should analyze the political and economic situation in the world in 2013year.

1. The US economy experienced strong economic growth last year.
2. Obama agreed not to send troops into Syria.
3. Funds invested by Russia in the 2014 Olympics in Sochi did not pay off.
4. At the end of 2013, the Central Bank began to massively revoke licenses from major Russian banks. This led to the closure of numerous deposits in Russian rubles.
5. The Central Bank of the Russian Federation said that it will not support the ruble in 2014.

If we evaluate these factors together, we can understand why the euro and the dollar are growing, while the Russian ruble is falling.

Financial projections

Analysts make conflicting forecasts about the position of the Russian ruble this year. Most of them agree that its rate will depend on oil and gas prices. Now the price of oil is reaching its maximum, but by the end of the year it should fall. This will definitely affect the exchange rate of the dollar, euro and Russian ruble.

But NATO and Europe continue to threaten Russia with economic sanctions. Such actions explain why the euro and the dollar are rising. 2014 is not an easy year for Russia, both economically and politically. The country is increasingly being threatened with exit from the G8. And if this happens, it will be difficult for the Russian ruble to hold its positions against the European and American currencies.

Who is stronger: dollar or euro?

American analysts and experts make positive forecasts for their currency, but the euro isskeptical. However, the two major currencies are in crisis.

The question of why the euro and the dollar is rising is inappropriate for America and European countries. There is a decrease in the value of hard currency (freely convertible currency) here.

In the US, more and more you can hear about the impending systemic crisis, although the President unveiled a new program to combat unemployment. Obama believes that this will help move important economic processes off the ground.

Greece, Portugal, economic problems in Spain and other eurozone countries are pulling the Eurocurrency to the bottom.

Alan Greenspan - the former head of the US Federal Reserve - believes that the euro has no future. The politician believes that the eurozone will not be able to withstand financial shocks and will soon collapse. But such an outcome of events will have a negative impact on the American economy, because large US companies are closely connected with the European market.

In addition, the world is seeing an increase in gold prices, which also leads to turmoil in the dollar/euro pair.