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Euro’s Five-Year Low Puts Parity in Spotlight as Russia Ups Ante

  • China’s Covid-19 outbreak is also casting a shadow on growth
  • ECB’s cautious stance on interest-rate hikes adds to headwinds
The EU has rejected demands to pay for Russian gas in rubles.

The EU has rejected demands to pay for Russian gas in rubles.

Source: Bloomberg

Updated on

The euro fell to its lowest against the dollar since March 2017 as investors predict the currency may soon reach parity with the U.S. dollar for the first time in two decades. 

The euro declined as much as 1% to 1.0534 after Russia cut off gas to Poland and Bulgaria, surpassing the trough reached in the early weeks of the pandemic in March 2020. There is now a prospect of the euro ending April below an uptrend lasting 20 years, which could put parity with the greenback on the horizon. The prospect of a rapid pace in Federal Reserve rate hikes is also fueling dollar strength, with a gauge of the greenback hitting a five-year high