Euro plunges to 99 cents, at a 20 year low

Following Russia’s closure of a significant gas pipeline to Europe, which prompted some governments there to announce emergency measures to lessen the agony of skyrocketing energy prices, European stock futures declined on Monday while the euro suffered a new decline.

Advertisement

Following Russia’s closure of a significant gas pipeline to Europe, which prompted some governments there to announce emergency measures to lessen the agony of skyrocketing energy prices, European stock futures declined on Monday while the euro suffered a new decline.

As markets increased the likelihood of a European recession, the euro fell 0.5% to a two-decade low of $0.99 (99 cents).

FTSE futures down 1.0%, while EUROSTOXX 50 futures fell 3.0%.

Due to a holiday in the United States, there was a spike in oil prices that affected the entire energy sector. Blue chips (.CSI300) were down 0.6% as a result of the news of additional coronavirus lockdowns in China, which only heightened the nervous mood.

The European Central Bank (ECB) is meeting this week to decide how much to hike interest rates, which is complicated further by the energy crisis.

“Europe is faced with a dire energy outlook, with numerous anecdotes of firms cutting back production,” said Tapas Strickland, head of market economics at NAB.

“The ECB will undoubtedly decide to hike rates this week,” he added “markets are close to fully pricing in a 75bp hike after numerous ECB officials said they were leaning that way, though there is still likely to be debate around 50 v 75.”