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  5. Euro Slumps Below $0.99 For First Time In Two Decades

Euro Slumps Below $0.99 For First Time In Two Decades

Euro Slumps Below $0.99 For First Time In Two Decades

The euro plummeted below $0.99 for the first time in twenty years following Russia’s shutdown of a major gas pipeline to Europe, leading to an increased risk of severe pain for European economies already struggling with high energy prices.

It was the first time since 2002 that the euro slipped below the $0.99 level when it sank as much as 0.7% to a low of $0.9888 during the afternoon trade in Asia on Monday. The price of oil unexpectedly fell below the threshold after Russia abruptly halted natural gas deliveries through the Nord Stream 1 pipeline, severely squeezing Europe’s energy supply and heightening recessionary concerns in the bloc, 

Meanwhile, State-owned Gazprom claimed that a technical issue was to blame for the suspension. The declaration, however, came shortly after the G7 nations declared their intention to proceed with a price ceiling on Russian oil exports to cut back on money going to Moscow that may be used to finance its invasion of Ukraine.

The Euro Stoxx 50 was expected to fall more than 3% when markets started in Frankfurt and Paris, reflecting the deteriorating picture for the European economy as represented in stock futures. The FTSE 100 was predicted to drop by around 1%.

At the same time, Analysts said Russia’s move to shut down the gas pipeline to Europe through Nord Stream 1 could substantially put obstacles to the European Central Bank’s plans for monetary policy normalization.

Meanwhile, Brian Martin, head of G3 economic research, said, “The Russian gas supplies has greatly complicated the ECB’s task. And now its decision not to restart gas flows via the Nord Stream pipeline could downside the growth risks while increasing the inflation outlook.”

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