Euro drops back under dollar parity

  • 2022-08-23
  • LETA/AFP/TBT Staff

LONDON - The euro fell back under dollar parity on Monday, hit by expectations the Federal Reserve will stick to its interest rate-hiking plans, AFP reports.

In morning trade, the European single currency slid as low as USD 0.9990, dented also by growing fears of winter energy shortages in Europe.

The unit had previously sunk below parity last month for the first time in nearly 20 years.

The British pound meanwhile dipped Monday to USD 1.1782, also touching its lowest point since mid-July.

All eyes are on this week's symposium in Jackson Hole, Wyoming, where Fed boss Jerome Powell will deliver a speech that traders will follow for an idea about the US central bank's next moves.

The euro is under additional pressure after Russia's Gazprom said Friday that the Nord Stream pipeline would be closed for maintenance at the end of the month, cutting Europe's daily gas deliveries.

"The move in the euro is probably being driven by a couple of things. The dollar is on a very strong run over the last week or so and looks to be continuing it into Jackson Hole," OANDA analyst Craig Erlam told AFP.

"It's also a euro story too as Europe prepares for another shutdown of Nord Stream later this month.

"With stocks already below where the bloc wants going into the winter, this is a considerable risk," he added.

As a result of the Gazprom news, Europe's Dutch TTF Gas Futures contract soared on Monday to EUR 292.995, not far from record highs hit after Russia launched its invasion of Ukraine.