The common European currency is the weakest since December 2022. It is less than six thousandths of a euro short of parity with the US dollar. Fears of an interruption in the supply of natural gas from Russia to the European Union are to blame.
The euro depreciated 1.29 percent against the U.S. dollar during Monday’s trading, reaching its lowest level in nearly two decades. Those dollar investors who wanted to buy one euro had to pay $1.0056 for it. The euro is thus approaching eurodollar parity.
Will Nord Stream 1 resume operations after the outage?
“Markets are very concerned about whether the Nord Stream 1 pipeline will resume operations after its 10-day shutdown,” Bipan Rai, a foreign exchange specialist at CIBC Capital Markets, based in Toronto, Canada, told Reuters. According to him, cutting off Russian gas would mean that the entire EU region would fall into economic recession.
The euro is not the only one losing
However, the euro was not the only major currency to lose ground against the dollar. The dollar also gained one percent against a basket of six currencies, reaching its strongest level since October 2002. The dollar was helped, among other things, by expectations of further interest rate hikes by the US Fed, which will meet in the last decade of July.
