Euro fell under 99 cents for the first time in nearly two decades, while Sterling was on the rope on Monday because the termination of Russia in the supply of gas down its main pipe to Europe triggered concerns about energy prices and growth. The Euro launched to $ 0.9880 in the Asian trade, the lowest level since 2002, while Sterling reached the lowest level of 2-1/2 new years at $ 1,14445, and remained close to the Pandemic Trench.
Meanwhile, the US dollar index, which measured the greenback against a basket of six currencies with the most severe Euro, reached the highest two new decades, soaring to the peak of 110.25. Russia canceled the Saturday deadline to flow into the Nord Stream pipe to continue, quoting oil leaks in the turbine. It coincided with the group of seven finance ministers who announced the closing of Russian oil prices. Pounds have also been burdened by concerns about the increase in energy costs. British Foreign Minister Liz Truss said during the weekend he would immediately take action to deal with an increase in energy bills and increase energy supply if he wanted to become the next prime minister of the British, as expected. [Nl8n30b0cp]
“We cannot have confidence in the view of natural gas in Europe, and this is negative for Euro. It is very dependent on Putin,” said Osamu Takashima, Head of FX Citigroup Markets’ FX Strategy. Yen, at 140.38 per dollar, is under pressure near the lowest level 24 years. The Australian dollar is sensitive to the risk of sliding 0.41% and approaches the lowest level of seven weeks at $ 0.6780.
“The first sequence effect seems to be that the high geopolitical risk and as a result the shocks of harmful global demand may be a dominating effect,” said Wisnu Varanhan, Economic Principal and Strategy at Mizuho Bank in Singapore. “Shocks of adverse demand in a very unpleasant geopolitical environment might trigger, and reflect, a safe demand for the US dollar … European currency may be the worst and on the back legs.” The increase in outsized interest rates is on this week’s card. The market has a price of nearly 80% of the 75 basis points (BP) increase in Europe and it is possible that almost 70% of the 50 BP increase in Australia.
“Someone will anticipate that ECB Hawkish must give a kind of attraction to the Euro. But on the contrary what you might get is a biting policy and dilemma tradeoff,” Varanhan said. In the United States, the price for the 75 BP increase this month is somewhat peeled back after a mixed work report on Friday, which contains several instructions about the loose -loose labor market. Fed Futures funds imply around 58% of opportunities for an increase of 75 bp.
Elsewhere in Asia, Yuan off the coast also dropped to the lowest level of two years which was fresh at 6,9543 per dollar, due to fears for long over the steps of the Covid-19 locking in the country. The Southern Technology Center of China in Shenzhen said that he would adopt the steps of tiered anti-virus restrictions that began on Monday, while Chengdu announced the locking sidewalk extension, because the country wrestled with new outbreaks.