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Different currencies: The euro has fallen to its lowest level against the US dollar in around 20 years
Photo: STEPHANIE LECOCQ/EPA
For the first time since 2019, Oktoberfest is back in Munich - and many people have traveled from the United States to attend.
One reason for the interest of Americans in particular this year could also be the dollar exchange rate, which is favorable for them.
"The Wiesn will never be that cheap for Americans again," said festival director Clemens Baumgärtner (CSU) of the dpa news agency.
After weak economic data, the exchange rate of the euro fell to its lowest level against the US dollar in around 20 years.
At one point in the afternoon, one euro cost just $0.97 – the level hasn't been this low since the end of 2002.
The European Central Bank set the reference rate at 0.98 dollars – the dollar thus cost 1.03 euros.
"The high energy prices are currently choking off the economy," said Thomas Gitzel, chief economist at VP Bank.
The increased gas and electricity prices not only burden consumers, but also entrepreneurs.
"The economic consequences of the war are only now really becoming apparent and could hardly be more brutal," said Gitzel.
The euro zone is suffering significantly more from the high energy prices than the USA, for example, as it has so far been heavily dependent on Russia for energy supplies.
The elections in Italy this Sunday are also causing uncertainty.
After the end of the government of Prime Minister Mario Draghi, which is currently only in office as an executive, right-wing parties are given good chances: Giorgia Meloni from the nationalist party Fratelli d'Italia could become the new prime minister.
Pound under pressure after tax relief plans
Meanwhile, the British pound has also come under significant pressure, falling below $1.11 for the first time since 1985.
The British government under the new Prime Minister Liz Truss wants to boost economic growth with extensive tax cuts for consumers and companies.
The British economy is expected to grow by an average of 2.5 percent, said Finance Minister Kwasi Kwarteng.
Higher national debt is to finance the program - but that weighs on the pound and British government bonds.
At the moment the UK is teetering on the brink of recession.
Meanwhile, the price of gold has fallen sharply, hitting its lowest level in more than two years.
Market observers explained the downturn just before the weekend with a sharp rise in interest rates on the capital markets, which makes fixed-interest securities more attractive to investors than investments in gold.
In midday trading, the price of a troy ounce of the precious metal fell by around $27 to $1,644.
The price of oil is also reacting to the developments: it has fallen below the $80 per barrel mark.
Traders said the risk of a recession had increased following the interest rate hikes by the US Federal Reserve and the British central bank.
The Fed raised interest rates by 0.75 points on Wednesday to combat high inflation in the US.
A number of other central banks, such as those in Great Britain and Norway, followed suit on Thursday.
Higher interest rates make loans more expensive.
The interest rate hikes unsettle investors.
There are concerns about a recession on the stock market worldwide and also in Germany.
The leading index Dax started the weekend down 1.97 percent.
Bundesbank President Nagel defends rate hikes
Meanwhile, Bundesbank President Joachim Nagel considers higher interest rates in the euro zone to be necessary, regardless of the looming recession.
"The main thing at the moment is fighting inflation," said Nagel, according to the speech transcript, at an event in Lucerne.
The Council of the European Central Bank acted decisively with the two significant interest rate hikes in July and September.
"Further tightening steps are in prospect and will have to come from my point of view," said Nagel.
He did not want to hide the fact that the fight against inflation will bring burdens with it.
"It should temporarily dampen growth," said the Bundesbanker.
"But doing nothing and letting things take their course is not an alternative." Inflation eats away at wealth and hits the weakest hardest.
This contradicts the claim of »prosperity for all«.
ani/dpa/Reuters/AFP