NEW YORK, July 11 (Reuters) – The euro fell to a 20-year low and approached parity against the dollar on Monday amid concerns that an energy crisis will plunge the region into a recession, while the currency of the US was driven by expectations. that the Federal Reserve will raise rates faster and farther than its peers.
The largest single pipeline carrying Russian gas to Germany, the Nord Stream 1 pipeline, began annual maintenance on Monday, and flows are expected to stop for 10 days. Governments, markets and companies are concerned that the shutdown may be extended due to the war in Ukraine. Read more
“The closest concern for the markets is whether Nord Stream 1 will be online again or not,” said Bipan Rai, head of US currency strategy at CIBC Capital Markets in Toronto, adding that “the markets they will probably have a price in recession. ”for the region if it doesn’t.
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The euro fell to $ 1.0051 against the US dollar, the weakest since December 2002.
The dollar index reached 108.19, the highest since October 2002.
The U.S. currency has won with expectations that the Fed will continue to raise rates aggressively as it faces rising inflation.
“The Fed will raise rates more aggressively than most other developed market central banks and we don’t believe other developed market central banks really have the bandwidth to keep up,” Rai said.
The Fed is expected to raise rates by 75 basis points at its July 26-27 meeting. Fed fund futures traders are setting the price for their benchmark rates to rise to 3.50% in March, from the current 1.58%. ,
A buyer pays with a ten euro ticket at a local market in Nice, France, June 7, 2022. REUTERS / Eric Gaillard
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U.S. consumers see inflation rising further next year, but expect a more moderate long-term pace, a sign that inflation expectations remain reasonably anchored, a Fed poll showed on Monday. New York. Read more
Consumer price data forecast for Wednesday is the main U.S. economic focus this week. Economists surveyed by Reuters expect the index to show that consumer prices rose at an annual rate of 8.8% in June. (USCPNY = ECI)
The Australian dollar was the worst performer of the day, falling to a two-year low for fears of global growth. Several Chinese cities have adopted new COVID-19 fresh, from commercial shutdowns to blockades, to curb new infections, which could create new supply disruptions. Read more
The Aussie fell to $ 0.6716, the weakest since June 2020.
In the cryptocurrency market, bitcoin fell 1.62% to $ 20,519.
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Currency bid prices at 15:00 (19:00 GMT)
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Additional report by Saikat Chatterjee and Dhara Ranasinghe in London; Edited by Tomasz Janowski and Jonathan Oatis
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