The Euro fell below $0.99 on 5 September, with uncertainties about the state of the European economy weighing heavily on the value of the EU’s centralised currency. High energy prices, including Gazprom’s recent decision to halt deliveries through the Nord Stream pipeline, have further hit the value of the Euro.
On Monday morning, the Euro fell 0.71% to $0.9883, the lowest on record since December 2002, when a sharp downturn sent stock markets crashing across Europe, Asia, and North America. Since the start of 2022, the Euro has weakened once again, with some economists forecasting a new global economic downturn.
Russian gas monopoly Gazprom’s decision on 2 September to completely halt deliveries of gas through one of Europe’s largest gas pipelines has sent shockwaves through foreign currency markets. The Japanese Yen also recently slipped to 24-year lows against the dollar and other major currencies have struggled to maintain their strength against the dollar.
The dollar index, which measures the US currency against six major currencies, has also reached two-decade highs, as the dollar rallies in strength but other major currencies, such as the British pound, plummet in value due to fears over growth and energy supply.
Related News
- Belgium risks 'ending up in a war economy' without EU help, warns De Croo
- Gas pipeline Nord Stream 1 to remain closed indefinitely due to ‘oil leak’
In July, the Euro reached parity with the dollar for the first time in 20 years, falling from $1.13 per euro at the start of the year.
Traders have previously warned that the Euro may risk becoming “unbuyable” if it reaches parity with the dollar. In recent months, foreign currency traders have begun to short the currency, expecting greater falls in the value of the European currency.
Janet Mui, head of market analysis at U.K wealth management firm Brewin Dolphin, told US network Squawk Box Europe that prospects for the European markets are now looking “very grim indeed”, stating that they are now reacting to the reality that Russia will continue to frustrate supply to Europe.
