Russia Shuts Gas Supplies To Europe: Euro Drops To 20-Year Low
On Monday, the Euro (EUR) dropped to a 20-year low following the Russian Federation’s shut down of the significant gas supply pipeline to Europe, which has sparked concerns regarding shortages in energy, increases in prices, and damages caused to the economy.
The United States Dollar Index (DXY) was at a 2 decade high. Early in Asia, the Euro (EUR) reached around 0.9903 US Dollars, just more than the low of 0.99005 US Dollars from the previous month. At around 1.1458 US Dollars, Pound Sterling (GBP) fell to a two-and-a-half-year low.
Worries about increasing energy prices have hurt even the British Pound (GBP). If Liz Truss, the British Foreign Minister, wins the election to become the country’s new Prime Minister, she has pledged to take urgent action to reduce growing energy prices and boost energy supplies.
At 140.23 to the US Dollar, the Japanese Yen (JPY) had a lot of pressure and was close to a 24-year low. At around 0.6790 US Dollars, the risk-averse Australian Dollar (AUD) fell by 0.3% and was close to a 7-week low.
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Invoking an oil leakage in a turbine, the Russian Federation did away with a Saturday target date for the Nord Stream pipeline, the offshore natural gas pipeline in Europe, to begin the energy supply. At the same time, the Group of 7 Finance Ministers announced a limit on Russian oil prices.
Carol Kong, the Senior Associate for Global Economics and Currency Strategy at the Commonwealth Bank of Australia, said that everything indicates that the Euro (EUR) will decline. Given all the negative news that has been reported about the economy of European nations, Carol Kong believes that this week the euro will continue to fall.
This week could also see significant rate increases. Markets have estimated a probability of approximately 75% for a 75 BPS increase in Europe and a probability of nearly 70% for a 50 BPS increase in the Commonwealth of Australia.
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