The sword of Damocles hangs high! Euro exchange rate hits 20-year low again

Aug 23, 2022

On August 23, after a lapse of more than a month, the exchange rate of the euro against the dollar fell below parity again, and the latest report was 1 euro against the US dollar 0.9932, which continued to hit a new low since 2002, and fell by more than 1% on the day.

The weakening of the euro is not surprising, as the euro zone is currently facing a difficult economic outlook and the woes are mounting. Many investment banks believe that the decline is the beginning of a deeper decline in the euro.

In other currencies, the U.S. dollar index stood at 109, the first time since July 14; GBP/USD fell below the previous low of 1.1759, continuing to hit a new low since March 2020; USD/JPY has continued to rise recently, and the market is watching this round Whether the market has a chance to break through the year high of 139.39.

Earlier, Gazprom announced that the only turbine in the Nord Stream 1 pipeline will be shut down for maintenance for three days from August 31, during which time the Nord Stream 1 pipeline will stop supplying gas. , which has put enormous pressure on the European continent.

In response to the energy crisis, German Chancellor Scholz and Deputy Prime Minister Habeck jointly visited Canada on Monday to seek to expand cooperation between the two countries in energy.

"It's clear that the euro zone is likely to slip into recession this winter, depending on whether energy reserves can last through the coldest months," said Jane Foley, senior currency strategist at Rabobank.