AS THE ENERGY CRISIS DEEPENS, THE EURO HITS A FRESH 20-YEAR LOW

Tue 23 August 2022:

Due to renewed concerns that an energy crisis could keep prices high and effectively push Europe into a recession, the euro on Tuesday fell to its lowest level in 20 years against the dollar.

The British pound momentarily approached March 2020 lows, and the Chinese yuan’s value dropped to a two-year low.

The euro was able to recover from the 20-year low of $0.99005 set early in the day as business activity figures from Europe were not as dismal as anticipated.

The likelihood of maintenance on the main Russian pipeline to Europe caused markets to tremble on Monday, which resulted in a substantial increase in British and Dutch wholesale gas prices. The Nord Stream 1 pipeline will be shut down by Russia for three days at the end of the month, the latest illustration of how unstable the continent’s energy supply is.

Energy supply has already been strained by the continent’s heat waves, and concerns are rising that any disruption during the winter months may be disastrous for business activity.

“Given the current mood, there’s obviously concerns as to whether that’s going to be three days or whether it’s going to be three years,” said Ray Attrill, head of FX strategy at National Australia Bank (NAB).

After hitting a one-month low of 137.705 earlier in the day, the Japanese yen increased to 137.24 per $1, while the pound fell to a fresh 2-1/2-year low of $1.1718.

After hitting a one-month low, the risk-averse Australian dollar increased to approximately $0.6888.

In other parts of Asia, the Chinese yuan fell to a level almost two years low of 6.8666 per dollar.

SOURCE: INDEPENDENT PRESS AND NEWS AGENCIES

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