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Euro falls below $0.99 after Russia stops supplying gas to Europe

10 and 5 euros.

Adrien Fillon | Nurphoto | beautiful pictures

The euro fell below $0.99 for the first time in 20 years after Russia announced it would shut off its main gas supply pipeline to Europe indefinitely.

The euro hovered just below 0.99 as European markets opened on Monday, trading at 0.9893 against the dollar shortly after 8 a.m. London time (3 a.m. ET). . In the early hours of the morning, it hit a low of around $0.9881.

The dollar index, which measures the greenback against six major currencies, also broke a fresh two-decade high as the pound slipped on worries about European energy supplies and economic growth. .

On Friday, Russian energy supplier Gazprom speak they will no longer supply natural gas to Germany through the vital Nord Stream 1 pipeline, due to a faulty turbine.

The announcement came hours after the Group of Seven Economic Powers agree on a plan to implement a price cap on Russian oil.

It comes ahead of Thursday’s European Central Bank meeting, when economists expect it to raise the benchmark deposit rate from zero to 0.5% or 0.75% amid worries concerns about Europe’s ability to meet energy needs this winter and the potential hit to growth.

“We expect that Russia is honoring the contracts it has, but even if the weaponization of energy will continue or will increase in response to our decisions, I think the Alliance Europe is ready to react,” said Paolo Gentiloni, EU economic commissioner. , told CNBC last weekend.

Meanwhile, the pound is trading at 1.1465 against the dollar as the UK prepares find out who its new British prime minister will. The new prime minister will be forced to take into account the growing cost of living crisis caused by Energy bills soar.

The pound fell 4.5% against the dollar in August, its worst month since Brexit, and a forecast analyst that it will “dig new deep” due to political and economic uncertainty, likely to hit $1.05 by the middle of next year.

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