The Euro-zone is facing a series of financial challenges, as the effects of the Russian war escalate further. Amidst the downfall of the global financial scene, the Euro is underperforming.
In a recent highlight of events, latest reports suggest that the inflation rate in the 19 countries using the Euro surged to 9.1% in August, marking the highest recorded data in the history of the Euro.
Energy data showed the highest CPI rate in the Euro-zone, at 38.3%
The statistical office of the European Union, Eurostat revealed the consumer price index (CPI) data Wednesday. The 9.1% inflation rate in August follows the 8.87% rate recorded in July. Per data from the Eurostat report, energy cost massively contributed to the unpropitious rise. The Eurozone has been battling with rising cost in energy, as Russian sanctions have dealt a huge blow on the electricity market.
Although electricity data showed the highest rate, reaching 38.3%, it was a drop from the 39.6% in July. The CPI data of 9.1% signifies the ninth consecutive rise in inflation rate in the Euro-zone. The most massive single increase was in March, a month after Russia invaded Ukraine. CPI data in March rose to 7.44%, a scary jump from the 5.87% rate in February. The increase has persisted since then.
The European Central Bank had increased interest rate by 50 basis points in July. The move was an attempt at combating the seemingly incessant increase in inflation rate. With a 9.1% rate in August—higher than the expected 9%—the Euro zone will be expecting another aggressive interest rate hike on September 8. How this will affect the broader financial markets, including stock and crypto, remains to be seen.
Stock and crypto markets have been struggling to survive of late
Besides the Russian war, the condition of the global financial markets has contributed to the high inflation rate. The EUR fell below the dollar to trade at a 20-year low of $0.9910 on August 23. Additionally, the stock and crypto markets have been struggling to survive of late.
The inauspicious comments from Federal Reserve Chair Jerome Powell on August 26 did not particularly help the situation. Upon warning of further interest rate hikes, the stocks and crypto markets collapsed further. The crypto markets especially bled into the weekend, reaching lowest points in August.
Notwithstanding, the markets are currently putting up a decent fight, with minor gains recorded on Tuesday. The firstborn crypto, Bitcoin (BTC) currently trades at $20,324 at the time of writing. This value is one of the lowest points for the asset in August, but it has successfully jumped above the $20k support level. Ethereum (ETH) has gained by 0.54% in the past 24 hours, and is now trading at $1,594.
The post Euro-Zone Inflation Rate Hits All Time High, Will Crypto Market Suffer More? appeared first on CoinGape.
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