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EUR/USD Trading Commentary
The euro fell below 99 cents for the first time in nearly two decades, while the sterling plunged, as Russia’s shutdown of gas supplies through its main pipeline to Europe sparked worries about energy prices and growth.
The euro slipped as low as $0.9880 in Asian trading, they are lower after 2002, so the free sterling hit a new two-and-a-half-year low at $1.14445, and came back close to They are trough the pandemic.
At the same time, the US dollar index, which the greenback measures against a basket of six currencies, the euro being the most imported, hit a new two-decade high, above the 110.00 level.
Russia stepped down on the same deadline to resume flow in the Nord Stream gas pipeline, citing a fuel source in a turbine. This decision was taken after the announcement by the finance ministers of the Group of Seven of a cap on the price of Russian oil.
Free has also been weakened by concerns about rising energy costs. Britain’s Foreign Secretary Liz Truss said over the weekend that she was instead putting together immediate action to tackle the house of energy bills and increase energy credits if it becomes, as expected, the next prime British minister.
The yen, at 140.38 to the dollar, is under pressure, near its lowest level in 24 years. The risk-sensitive Australian dollar slid and was near a seven-week low of $0.6780.
Several central banks met once a week with rate hikes and important forecasts. The markets put the probability of a 75bp house in Europe at 80% and the probability of a 50bp house in Australia at 70%.
In the US, the price of a 75 basis point rise this month fell little near a mixed jobs report on Friday, which contained some slack in the labor market.
Fed funds futures imply about a 58% probability of a 75 basis point house.
Elsewhere in Asia, the offshore yuan also fell to a two-year low of 6.9543 to the dollar amid lingering concerns over containment measures to tackle COVID-19 in the country.
The technology center in Shenzhen, southern China, said it would adopt anti-virus restriction measures from Monday, while Chengdu announced an extension of verification measures, although the country is grappling with new epidemics.