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The euro slipped back below par against the dollar on Wednesday. They extended its decline for the third consecutive month as the deepening energy crisis fuels recession fears, while the European Central Bank pushes ahead with interest rate hikes.
Russia on Wednesday halted gas supplies from the Nord Stream 1 pipeline, intensifying an economic battle between Moscow and Brussels and raising the prospect of recession and energy efficiency in some of the world’s richest countries.
Fears that gas will not resume flowing through the pipeline after scheduled maintenance ends on Saturday have kept dealers in a state of anxiety.
The uncertainty caused the euro to fall below par against the dollar. And it fell in the latest trading by 0.4 percent to $ 0.9976.
Meanwhile, eurozone inflation rose to another record high in August, exceeding expectations and reinforcing the idea that the European Central Bank will raise interest rates.
The Norwegian krone fell more than 1 percent against the dollar and the euro after the country’s central bank said it would buy more foreign currency for the sovereign wealth fund.
The dollar index, which measures the performance of the US currency against a basket of six currencies, rose 0.3 percent to 109.10, near its two-decade peak recorded on Monday at 109.48.
The index is on track for a third straight month of gains, after rising more than 3 percent in August.
Cryptocurrencies rebounded, with Bitcoin rising 2.7% to $20,339, and Ether rising 5% to $1,599.
