(Reuters) – Concerns about how rising energy prices will affect the eurozone’s economy continued to push the euro down against the dollar.It was almost at its lowest level in almost 20 years.
On Tuesday, the Norwegian government broke up a strike in the oil and gas industry that had stopped oil and gas production. This ended a standoff that could have made Europe’s energy shortage even worse.
Goldman Sachs (NYSE:GS) raised its predictions for the price of natural gas by saying that a full restoration of Nordstream 1 flows is no longer the most likely outcome.
“The threat of not delivering is not the only thing putting pressure on the euro,” said Moritz Paysen, a forex and rates adviser at Berenberg.
“The already very high cost of energy is also a problem.” “Europe’s energy costs are many times higher than those in the U.S,” he added.
At 1.0266, the euro was the same as the dollar. On Tuesday, at 1.0236, it hit its lowest point since December 2002.
The divergence between central banks’ tightening cycles across the Atlantic remained in investors’ focus.
ING analysts said, “The big question is whether this drop in growth prospects is enough to stop tightening cycles, especially the Fed’s.”
They think that the foreign exchange market will stay where it is on Wednesday before the Federal Open Market Committee minutes from its June meeting come out at 1800 GMT.
Analysts from Unicredit (BIT:CRDI) said, “The general view is that the Fed might have more chances than many other central banks to keep normalising policy in the long run.”
The dollar index, which compares the dollar with six other currencies, was flat at about 106.5.
Early selling sent the euro to its lowest level against the Swiss franc since the Swiss National Bank stopped putting a cap on its currency in 2015.
The single currency fell 0.1% to 0.9933 after hitting a new 7-year low at 0.9911.
Some safety bids helped the yen after Japanese households’ inflation expectations rose in the three months leading up to June. The number of homes expecting prices to go up over the next year hit the highest level in 14 years.
The dollar fell by 0.3%, making it worth 135.43 yen. At the end of June, it reached 137, which was its highest point since 1998.
The Bank of Japan said it would not pull back on monetary stimulus because inflation is caused by rising fuel and raw material costs, which are blamed on the Ukraine crisis and are likely to be temporary. It lost about 1% of its value and was last worth $20,190. Ether went up 0.6% to $1,142.
