News ID: 320506
Published: 0406 GMT March 08, 2022

Euro near 22-month lows

Euro near 22-month lows

The euro was trading near 22-month lows on Tuesday, while currencies lifted by rocketing energy prices paused after a weeks-long rally.

The euro regained ground on the day after five sessions of declines, but is still trading near a trough of $1.0806 – its lowest since March 2020 when the COVID-19 pandemic gripped Europe, Reuters reported.

The Ukraine crisis has led to soaring energy prices and concerns about inflation and a possible hit to global economic recovery.

"The price action appears to reflect building concerns over a sharper slowdown/recession for the global economy on the back of the energy price shock," currency analysts at MUFG said in a note.

"The weakening growth outlook for the euro-zone economy is already reflected by the weaker euro."

The dollar index was broadly flat on the day at 99.146, while the euro was last up 0.2% at $1.08795.

Traders are expecting choppy markets, with euro/dollar volatility gauges at their highest since the market chaos of March 2020. Overall forex volatility gauges were also up to the highest level since April 2020.

The ECB meets on Thursday with the spectre of stagflation prompting economists to suggest policymakers might delay rate hikes until late in the year.

Sterling was last up 0.2% at $1.31270 after falling to a new 16-month low of $1.30830 earlier in the trading session.

The yen dipped slightly to 115.57 per dollar.

 

   
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