The Euro is nearing parity with the U.S. dollar as mounting economic woes depress the
European Union’s common currency.
The Euro was trading 0.2% lower at $1.002 U.S. in London trading, paring earlier losses that
pushed the single currency to near parity with the greenback.
Fears of a recession throughout Europe have grown in recent weeks as uncertainty rises over
the continent’s energy supply, with Russia threatening to reduce gas flows to Germany and
other countries.
Russia has suspended gas deliveries via the Nord Stream 1 pipeline for annual summer
maintenance. The pipeline is Europe’s biggest piece of gas import infrastructure, carrying
around 55 billion cubic meters of gas per year from Russia to Germany via the Baltic Sea.
The scheduled 10-day suspension of gas flows has stoked fears of a permanent cut to supplies,
potentially worsening a natural gas crisis.
The prospect of an economic recession has also thrown into doubt whether the European
Central Bank (ECB) will be able to tighten monetary policy enough to reign in record-high
inflation.
The Euro’s value against the U.S. dollar has steadily declined this year since Russia invaded
Ukraine at the end of February. The Euro is now trading at its lowest level vis-à-vis the
American currency since 2002.