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Title: Euro just off two-decade low on concerns over energy prices

Jul 06, 2022 03:46AM ET

By: AnalysisWatch

The euro traded just below its lowest level in nearly two decades against the dollar as concerns continued to grow about the impact of rising energy prices on the eurozone economy.

The Norwegian government intervened on Tuesday to end a strike in the oil sector that had curtailed oil and gas production, ending a standoff that could have worsened Europe's energy supply crisis.

Meanwhile, Goldman Sachs (NYSE:GS) raised its natural gas price forecasts and said a full restoration of Nordstream1 flows was no longer the most likely scenario.

The euro was unchanged at 1.0266 against the dollar after hitting 1.0236 on Tuesday, its lowest level since December 2002.

The divergence between central bank tightening cycles across the Atlantic remained in investors' focus.

They expect the currency market to consolidate on Wednesday ahead of the release of the minutes of the US Federal Open Market Committee's (FOMC) June meeting, expected at 18:00 GMT.

The dollar index, which tracks the greenback against six other currencies, was unchanged at 106.5.

An early sell-off briefly sent the euro to its lowest level against the Swiss franc since the Swiss National Bank abandoned its currency cap in 2015.

The single currency fell 0.1% to 0.9933 after hitting a fresh 7-year low of 0.9911.

The yen received some support from some safety offers after Japanese households' inflation expectations rose in the three months to June, with the share of households expecting prices to rise in the coming year reaching the highest level in 14 years.

The dollar fell 0.3% to 135.43 yen. At the end of June, it had reached 137, its highest level since 1998.

The Bank of Japan has said it will not withdraw monetary stimulus as inflation is due to rising fuel and commodity costs blamed on the Ukraine crisis and is likely to prove temporary. Bitcoin fell about 1% to last trade at $20,190. Ether rose 0.6% to $1,142.

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