The euro falls to a new two-decade low

The euro fell to a fresh two-decade low on Tuesday, as concerns about energy supplies and economic growth rocked Europe, while the dollar remained steady against key rivals, helped by safe-haven flows.

The euro hit its lowest level since late 2002 at $0.9909 and was last down 0.29 percent at $0.9914.

Russia will halt natural gas supplies to Europe via the Nord Stream 1 pipeline for three days later this month, the latest reminder of the continent’s precarious state of energy supplies.

Heat waves across the continent have already strained energy supplies and there are growing concerns that any disruption during the winter months could have a devastating impact on business operations.

“Of course, given the current sentiment, there are concerns as to whether it will be three days or three years,” said Ray Attrill, head of FX strategy at National Australia Bank (NAB).

“Will it really be just a three-day maintenance or is this just another example of arming gas supplies to Europe?”

The pound was similarly dragged to a fresh two-and-a-half year low of $1.1729, while the Japanese yen stabilized at 137.270 per dollar after hitting a monthly low of 137.705 earlier in the day.

Investors’ focus for Tuesday will be the flash manufacturing PMI readings for the euro-zone and the UK later in the day, which will provide further clarity on the growth trajectory for the respective economies.

Investors are also awaiting the minutes of the European Central Bank’s (ECB) latest monetary policy meeting on Thursday, which is likely to sound hawkish even as the continent faces a slowdown in growth.

The risk-sensitive Aussie fell to a one-month low and last traded 0.29 percent lower at $0.6859. The kiwi slipped 0.15% to $0.6163.

Elsewhere in Asia, the Chinese yuan fell to a nearly two-year low of 6.8552 per dollar.

Against a basket of currencies in which the euro is the most heavily weighted, the US dollar index remained firm at 109.12, attempting to break a two-decade high of 109.29 set in July.

Another reason investors have sought refuge in dollars is the growing risk of an aggressive message from the Federal Reserve’s Jackson Hole Symposium flagged by several officials last week.

“Bonds sold off, led by the front end,” analysts at ANZ said. “That’s possibly in anticipation that Chairman (Jerome) Powell’s speech on Friday is likely to reiterate the hawkish message.”

Yields on the benchmark 10-year Treasury note are up about 4 basis points on the week, to last at 3.0091 percent. Yields on the 2-year Treasury bills similarly rose about 4 basis points to 3.3018 percent as investors continued to bet on inflation and Fed watch mode.

https://www.independent.ie/business/world/euro-falls-to-fresh-two-decade-low-41930500.html The euro falls to a new two-decade low

Fry Electronics Team

Fry Electronics.com is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – admin@fry-electronics.com. The content will be deleted within 24 hours.

Related Articles

Back to top button