The euro collapses and is trading near parity with the dollar | AlMomento.Net

MADRID – The euro fell against the dollar on Monday, bringing currencies closer to parity again, as the eurozone faces a drop in Russian gas supplies.

Meanwhile, stock markets and oil prices fell amid rising inflation, fears of a recession and a new outbreak of the virus in Shanghai, which raised fears of another lockdown in China’s largest city.

Around 1200 GMT, the euro fell by one percent to $1.0083, as a planned cut in gas supplies heightened fears of rising inflation in the euro zone.

The euro had already slipped below $1.01 on Friday, to a nearly 20-year low of $1.0072, amid growing fears of a euro zone recession as global inflation hits record levels. Its multi-decade rally is due to rising energy prices.

Traders said the European single currency was also suffering as the Federal Reserve raised US interest rates more aggressively than the European Central Bank.

After rising above $1.01, the euro once again headed towards parity in Monday’s trading.

It came on the heels of Russian energy giant Gazprom’s decision to start 10 days of maintenance on its Nord Stream 1 pipeline, as Germany and other European countries anxiously watched whether the gas would return to work.

Annual work on the gas link was scheduled ahead of time.

But the fear is that with relations between Russia and the West at their lowest level in years due to the invasion of Ukraine, Gazprom could seize the opportunity to simply close the valves.

“In Europe, inflation is not the only thing affecting sentiment,” said Fouad Razakzadeh, market analyst at City Index.

“Concerns about energy security are also affecting risk sentiment… There are concerns that Russia will refuse to restore supplies.”

Later on Monday, the euro rebounded slightly to $1.0093.

bags fall

On the equity front, European stocks were in the red after heavy losses in most major Asian markets, while Wall Street indexes opened the week on a cautious note, as Monday’s session started lower before a report was released. The legal battle begins with Elon Musk.

Investors remain concerned about the US and global economic outlook as new strains of the Covid virus threaten to cause further shutdowns in Asia, as they brace for an onslaught of corporate earnings reports for the quarter.

With the Federal Reserve aggressively raising interest rates to cool the highest rate of inflation in more than 40 years, all eyes will be on Wednesday’s CPI data for signs of some relief.

Surprisingly strong June jobs data released on Friday provided a picture of a strong economy potentially able to withstand higher borrowing costs, as well as a slight easing in wage pressures.

But the war in Ukraine and Covid remain question marks, and stocks have been falling for weeks.

“There are a lot of things to deal with at the moment. And of course the market doesn’t like uncertainty,” said Maris Oge of Tower Bridge Advisors.

“So it’s good to have a jump here and there, but the long-term trend doesn’t seem to have changed,” Aug told AFP.

About 20 minutes into the trading session, the Dow Jones Industrial Average was down 0.6 percent to 31,162.32.

The broad-based S&P 500 fell 1.2 percent to 3,852.12, while the tech-rich Nasdaq Composite fell 2.1 percent to 11,395.27, after five days of sustained gains during the week.

Twitter plunged 7.5 percent after news that Musk had canceled his deal, and media reports said the company had hired prominent New York law firms, Acchtel, Lipton, Rosen and Katz, to fight his decision.

Investors have also been watching the steps of US President Joe Biden, who has been considering removing some tariffs on hundreds of billions of dollars in Chinese goods imposed by his predecessor, Donald Trump.

Concerns about China’s growth

It raised the possibility of the latest sell-off in stocks in Hong Kong and Shanghai on Monday.

Chinese tech companies have been hit after authorities fined giants Tencent and Alibaba for failing to properly report previous deals.

Operators of listed casinos in Hong Kong also fell sharply after officials in Macau initiated a week-long closure to curb the worst outbreak of the coronavirus.

Losses also occurred in Sydney, Seoul, Taipei, Manila, Mumbai, Jakarta and Wellington.

However, Tokyo rose as investors cheered Japan’s ruling bloc with a solid victory in Sunday’s upper house election, which took place days after the assassination of former Prime Minister Shinzo Abe.

The outcome should provide some stability to the government, while there were also hopes for a reshuffle and economic stimulus.

Shanghai recorded more than 120 cases of the virus over the weekend, after it saw its first highly contagious Omicron strain BA.5, forcing authorities to run another mass test.

With China obsessed with its strategy to stamp out the disease, there is growing concern that authorities will return to another painful lockdown, as Shanghai residents emerged from just a two-month lockdown in June.

Meanwhile, new infections were detected in other parts of the country, including Beijing.

This week’s data will provide an additional update on the economic impact of these measures, as well as similarly tight controls in Beijing.

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