The euro’s common currency exchange-rate turned closer in line with the US dollar, as heat concerns and the risk of economic downturn weighed on the eurozone’s outlook, while economic uncertainty backed a broad rally in the dollar and euro.
The euro fell as much as 1.5% value to $1.0098, surpassing its previous week’s low. The currency’s decline has been sudden and unexpected. A string of increasingly large Federal Reserve interest-rate hikes has boosted the dollar, while Russia’s war with Ukraine has harmed the eurozone’s economic outlook and increased the cost of its energy imports.
USD Gaining Value
For the first time in 20 years, the US dollar has surged so far that it is nearly equal in value to the euro. However, this trend threatens to harm American morale and make their products more expensive to foreign buyers.
Euro surges over 40% from its all-time high of €1.5990 which was recorded in July 2008. The 20-year low of €0.9649 was registered in September 2002.
Natural gas prices in Europe continued their endless rise on Monday, reaching highs not seen since early March, as planned strikes in Norway impacted market concerns about Russian supply cuts. The front-month gas price at the Dutch TTF hub, a European benchmark for natural gas trading, was seen trading up 7.8% to 175.5 euros ($180.8) per megawatt-hour last seen trading.
All of these factors have combined to impact the euro. Since the beginning of the year, the eurozone’s currency has lost more than 9% of its value against the US dollar. However, rising deflationary fears may limit the central ability of the bank to tighten monetary policy.