Euro Nears Parity with Dollar as Pound Hits Two-year Low

THE GUARDIAN: Europe’s single currency battered by fears over gas supply from Russia and US interest rate rises

One euro coin placed on top of one dollar bills Photograph: Gerard Bottino/SOPA Images/REX/Shutterstock
The euro is on the brink of parity with the dollar as investors fear that an energy crisis will plunge the region’s economy into recession.

The single currency fell to just $1.0003 on Tuesday morning, pushed lower by worries that the scheduled shutdown of the Nord Stream 1 pipeline – which transports natural gas from Russia to Europe – for maintenance could be made permanent.

Russia’s invasion of Ukraine in late February has triggered fears over Europe’s energy supply and hurt the region’s economies, pushing the euro 12% lower against the US dollar so far this year.

The euro is also being hit by expectations of further aggressive interest rate rises by the US Federal Reserve, which are driving the dollar higher. » | Julia Kollewe and Graeme Wearden | Tuesday, July 12, 2022

Business Live: Euro falls to brink of parity with dollar over fears Russia will cut off gas supplies »

Incompetence at the Fed, or What? Dollar Could Come Under Even More Pressure if Gulf States Unpeg Their Currencies
TIMESONLINE: Foreign exchange markets are on alert this week for the embattled dollar to face a further, severe sell-off after key talks between the Middle East’s Gulf states that could lead to them scrapping their currencies’ pegs to the greenback.

Rulers of the six nations of the Gulf Cooperation Council (GCC) meet today and tomorrow in the Qatari capital of Doha amid significant pressures to sever their currency ties to the falling dollar, which is fuelling record inflation in their countries.

Officially, the GCC states have insisted that the key currency issue is not on the agenda for the rulers’ summit talks. However, there is intense speculation that mounting economic and social strains inflicted by the currency pegs could see them scrapped, or the Gulf currencies revalued, either at the meetings or within weeks of them.

Any move by five of the six GCC countries to follow a lead set by Kuwait in May and abandon their long-standing dollar pegs would add to already severe stress on the American currency, whose overall value on its broad trade-weighted index has plunged by nearly 12 per cent over the past two years, raising inflationary anxieties for the United States. Dollar faces new sell-off if Gulf states end greenback pegs >>> By Gary Duncan

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