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Title: Euro hits 20-year low on Russian gas halt

Writer: analysiswatchanalysiswatch


Sep 05, 2022 02:05AM ET


By: AnalysisWatch


The euro fell below 99 cents for the first time in almost 20 years and sterling weakened on Monday as a halt in gas supplies through Russia's main pipeline to Europe sparked concerns about energy prices and growth.


The euro fell to $0.9880 during Asian trading, its lowest level since 2002, while sterling hit a new 2-1/2-year low of $1.14445 and remained near its pandemic low.


Meanwhile, the dollar index, which measures the greenback against a basket of six currencies with the biggest weighting to the euro, hit a new 20-year high and climbed to a new high of 110.25.


Russia has cancelled Saturday's deadline to resume flow through the Nord Stream pipeline, citing an oil leak in a turbine. This came at a time when the finance ministers of the Group of Seven countries announced restrictions on Russian oil prices.


The pound has also been weighed down by concerns over rising energy costs. British Foreign Secretary Liz Truss said at the weekend that if she becomes the next British prime minister, as expected, she will take immediate action to tackle rising energy bills and increase energy supplies.


The yen was under pressure near a 24-year low of 140.38 per dollar. The risk-sensitive Australian dollar fell 0.41% and was near a seven-week low of $0.6780.


An above-normal interest rate hike is expected this week. Markets have priced in a near 80% chance of a 75 basis point rate hike in Europe and a near 70% chance of a 50 basis point rate hike in Australia.


In the United States, the price for a 75 basis point rate hike this month has fallen slightly following Friday's mixed jobs report, which contained few signs of a loosening labor market.


Fed funds futures suggest about a 58% chance of a 75 basis point rate hike.


Similarly, the overseas yuan fell to a new two-year low of 6.9543 per dollar as concerns persist over the country's COVID-19 lockout measures.

 
 
 

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