The euro slumped to a two-decade low on Tuesday as the latest rise in gas prices in Europe raised recession concerns, while the dollar was unable to stem a rally in US Treasury yields.
Many currencies were under pressure. The 1% drop in the euro EUR=EBS pushed it to its weakest since late 2002. The yen JPY=EBS returned to close to 24-year lows, while the Norwegian krone shed 1.2% due to the strike of workers in the gas sector.
MUFG’s Derek Halpenny said the risks of Europe slipping back into recession appear to be rising after another huge 17% jump in natural gas prices in both Europe and the UK.
“It will remain very difficult for the euro to recover significantly as the energy picture worsens and the risks to economic growth rise sharply,” Halpenny said.
The sharp sell-off also took the euro to its lowest level against the Swiss franc EURCHF= since the Swiss National Bank abandoned its currency cap in 2015. It also gave way against the British pound, which has its own economic and political concerns to contend with at this time. moment.
Even the Australian dollar failed to gain ground despite the country’s first consecutive interest rate hike of 50 basis points overnight, cementing the fastest rate hike since 1994.
The Australian dollar AUD=D3 was down 1% at $0.6787, after hitting $0.6895 earlier in the day. So far this year, it has accumulated a fall of close to 7%.
The strength of the dollar, meanwhile, took the yen JPY=EBS back to its lowest level in 24 years. In its last price, it operated at 135.79 units per dollar.
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