The euro fell below $0.99 after Russia cut off gas supply on a major pipeline to Europe, raising concerns about a deepening energy crisis across the region. This is her lowest price in 20 years.
The euro is increasingly correlated with natural gas prices, with the former declining when prices of energy sources rise.
Investors believe the hit to Europe’s economy will be huge as Europe scrambles to cut supplies from Russia and build up reserves before the cold winter arrives.
Russia has scrapped Saturday’s deadline to resume flow down the Nord Stream pipeline, citing an oil leak in a turbine. This comes at the same time that the G7 Finance Ministers announced a price cap for Russian oil.
The euro fell to $0.9876 in European trading on Monday. This was his lowest level since 2002. And as the UK economy is also vulnerable to higher gas prices, the pound fell 0.5% to a two-and-a-half-year low at $1.1444.
“Gas flows have contracted more than expected and we are already seeing evidence that demand disruption is weighing on activity, on websites to post free ads.” Goldman Sachs strategist Michael Cahill said.
“We now expect the euro to be further below par ($0.97) and remain there for the next six months,” he added.
It’s been a very important week for the euro, with investors also gearing up for Thursday’s European Central Bank (ECB) meeting, with the market poised for a nearly 80% chance of a massive 75 basis point (bp) rate hike. It incorporates possibilities.
ECB officials are keen to stabilize the euro, which has lost 20% of its value over the past three months. As it shows on,, free classified ads sites, this leads to a desire to keep inflation down through tightening policies.
Top 3 Best, Other currencies, which tend to underperform when market confidence falters, also fell on Monday. The risk-sensitive Australian dollar fell 0.5% as it approached a seven-week low of $0.6774.
The dollar’s appeal as a workhorse this year has helped it rise even against safe-haven currencies. The Japanese Yen fell to 140.35 yen to the dollar, nearing a 24-year low.
As per, Latest News, Vishnu Varathan, head of economics and strategy at Mizuho Bank in Singapore, said: “The primary effect is likely to be dominated by heightened geopolitical risks and the resulting negative impact on global demand. It is.”
“An adverse demand shock in a highly unfavorable geopolitical environment would likely trigger and reflect safe demand for the US dollar…European currencies would probably suffer the worst and retreat, as per, websites to post free ads.
The offshore Chinese yuan fell to a new two-year low while the dollar rose 0.4% to 6.9543 top dollars. This is due to lingering concerns over his COVID-19 lockdown measures in the country, as per, free classified ads sites.
Shenzhen, a technology hub in southern China, said it would adopt phased virus control measures from Monday, while Chengdu announced an extension of lockdown restrictions as the country grapples with a new outbreak.