Although Europe is trying to get rid of its dependence on Russian supplies and create sufficient gas reserves for the winter, investors are counting on the fact that the shutdown of Nord Stream 1 will have a huge impact on its economy.
As a result, the currency used by the 19 member countries of the European Union fell to $0.9876 at one point on Monday morning, the lowest level since 2002. The euro later recovered to $0.9939.
“Gas flows have been cut even more than expected,” said Goldman Sachs analyst Michael Cahill. “We now expect the euro to fall further below parity ($0.97) and remain at this level for the next six months,” he added.
The price of gas skyrocketed by almost 30 percent
The further course of the euro will also be influenced by the European Central Bank (ECB), which, according to analysts’ estimates, should raise interest rates by 75 basis points at Thursday’s monetary meeting to help tame rising inflation in the eurozone.
In addition, ECB officials will want the euro to stabilize after losing around eight percent of its value over the past three months.