Euro Approaches Two-Decade Low as Gas Prices Raise Growth Fears

Euro Approaches Two-Decade Low as Gas Prices Raise Growth Fears

LONDON, Aug 24 – The euro traded near a two-decade low on Wednesday, amid growing recession fears fueled by a potential energy supply shortage, while the dollar recovered some data-inspired losses. on Tuesday, which were weaker than expected.

* Disappointing surveys of the US manufacturing and services sectors released on Tuesday and slumping new home sales gave the dollar a breather after a run that took the greenback to its lowest level. strong against the euro in two decades.

* Europe, however, has its own growth problems stemming from its increased exposure to Russian gas supplies, as the region looks to refuel ahead of winter.

* Month-to-date Dutch gas, the benchmark for Europe, rose again on Wednesday as the prospect of a halt in supply from the Nord Stream 1 pipeline kept investors on their toes.

* On Friday, Russia’s state-owned energy company Gazprom said Russia will cut off natural gas supplies to Europe for three days via Nord Stream 1 due to unscheduled maintenance.

* The euro briefly traded at $1 on Tuesday, but fell back to $0.99175 in the European session, just above Tuesday’s 20-year low of $0.99005.

* The market is awaiting the annual Federal Reserve symposium in Jackson Hole, Wyoming, which begins on Thursday and will be addressed by Fed Chairman Jerome Powell on Friday.

* The dollar index, which measures the greenback’s performance against a basket of six currencies, rose 0.37% to 108.95, near a two-decade high hit in July at 109.29.

* Money markets are fully pricing in a 50 basis point rate hike at next month’s Fed meeting, with traders pricing in more than 50% of the chance of a higher than 75 basis point hike, according to data from Refinitiv.

* On Tuesday, Minneapolis Fed President Neel Kashkari repeated the need for more aggressive rate hikes to control inflation.

Samuel Edwards
Samuel Edwards is the name you must have heard many times while reading reports related to Finance, that's what he is good at. From Major Investments to Stock Market Updates, he got 'em all. Be ready to blow your mind by the mind-blowing reports of Finance World from Samuel Edwards.