Euro hits 20-year low as Russian pipe shutdown rocks markets
Moneylife Digital Team 05 September 2022
Financial markets are being rocked by the shutdown of Russias Nord Stream 1 pipeline, as the energy squeeze on European economies intensifies as winter approaches.
The euro fell to a two-decade low during early trading on Monday morning, after Russian energy major Gazprom extended the shutdown of its gas pipeline to Germany on September 2, The Guardian reported.
Fears over sky-high energy prices, and possible shortages, pushed the euro further below parity against the US dollar sending the single currency as low as $0.9879 against the US dollar for the first time in two decades.
Nord Stream 1 was due to restart operations on Saturday morning, after a three-day shutdown for maintenance.
But Gazprom dashed hopes of a resumption the previous day, blaming a leak.
Analysts predict gas prices will soar, having fallen back from recent highs last week, The Guardian reported.
Michael Hewson of CMC Markets said" "Russia's actions on Friday in indefinitely closing the pipeline could see renewed upward pressure on European and UK natural gas prices when markets reopen today, after seeing big falls in prices last week as UK natural gas prices fell 39 per cent, while European prices fell 33 per cent."
European stock markets are heading for sharp losses at the open, with Germany's DAX down 2-3 per cent in the futures market, The Guardian reported.
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