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Wednesday, March 29, 2023

Euro continues slide toward dollar parity 

The currency has weakened to a 20-year low against the greenback 

The euro on Friday continued its slide to new 20-year lows against the dollar amid concerns of the bloc’s looming recession, with investors betting on potential parity with the US currency. 

It was trading as low as $1.0081 to the dollar on Friday as of 07:44 GMT. The currency’s downward spiral has been swift, given that it was trading around $1.15 in February.

There’s approximately a 50% implied probability of the euro hitting parity against the greenback in the next month and a one-in-four chance that it will hit 0.95 by the end of the year, according to a Bloomberg options-pricing model.


The currency has been in consistent decline as fears of a Eurozone recession intensify amid rising uncertainty about Russian energy supplies. In June, shipments to Europe by Russia’s Gazprom via the Nord Stream 1 pipeline dropped to about 40% of capacity because of parts shortages caused by sanctions on Moscow. The pipeline will shut down completely for 10 days in mid-July for regular maintenance.

Meanwhile, some experts note that the euro “remains effectively unbuyable this summer.” 

The chief global currency strategist at Societe Generale SA, Kit Juckes, told Bloomberg: “Europe’s energy dependency on Russia is falling, but not fast enough to avoid recession if the pipeline is closed. If that happens, EUR/USD will likely lose another 10% or so.”

For more stories on economy & finance visit RT’s business section


https://ift.tt/DiFEhzj 08, 2022 at 01:52PM
from RT – Daily news

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