The euro fell below $1.06 for the first time in five years

The euro fell below $1.06 for the first time in five years against a broadly stronger dollar on Wednesday, amid concerns about energy security and slowing growth in China and Europe.

The euro fell to a five-year low of $1.05890 after Russia’s energy giant Gazprom said it would cut gas supplies to Poland and Bulgaria. In the latest trading, the euro fell 0.16 percent to $1.0616 by 0800 GMT.

So far this month, the European single currency has fallen by more than four percent and is heading for its worst monthly loss in more than seven years, as uncertainty due to the war in Ukraine and the closure to combat Covid-19 in China led investors to dump the euro in favor of the dollar, which is a safe haven.

Data also showed that consumer confidence in France, the second-largest economy in the eurozone, fell more than expected in April.

The dollar index, which measures the performance of the US currency against a basket of six competing currencies, rose 0.3 percent to 102.6, after touching the highest level since the early days of the pandemic.

The dollar also supported investors’ bets that interest rates would rise in the US faster than in all other major economies.

The Chinese yuan recovered after falling to a 13-month low on Monday and settled at 6.5547 against the dollar.

Data also showed that Chinese industrial profits grew at a faster pace in March.

The pound sterling fell to a new low, the lowest in 21 months, recording $1.2543. The British currency fell more than 2 percent against the dollar this week as data on retail sales caused a rethink of interest rate expectations in the country.

Commodity-related currencies also witnessed selling in favor of the safe-haven US dollar, which pushed the New Zealand dollar to its lowest level since January, recording $0.6551.

The Norwegian krone fell against the dollar to its lowest level since November 2020, recording 9.2200.

The dollar’s strength also curbed the recovery of the Japanese yen, which had received some support, which led to a decline of 0.7 percent to 127.93 per dollar.