The euro fell 0.24% to $0.9930 on Monday, after falling to $0.9878, its lowest level since December 2002.
The European currency has lost 13% of its value against the dollar since the beginning of the year.
“The euro fell below $0.99 for the first time in twenty years after Russia closed the Nord Stream 1 gas pipeline for an indefinite period to Europe at a time when the G7 countries agreed to impose a ceiling on the price of Russian gas exports,” said Victoria Scholar, an analyst at Interactive Investor.
The European currency “will likely fall further,” said Michael Hewson, analyst at CMC Markets.
The seven major industrialized countries targeted Russia’s energy revenues by agreeing to a ceiling on the price of its oil exports. Moscow responded by declaring a complete halt to gas supplies through the Nord Stream pipeline, which is vital to Europe, until a turbine is repaired.
The turbine manufacturer Siemens Energy considered the downtime unjustified from a technical point of view.
After the price of European natural gas on August 26 approached its historical maximum of 345 euros per megawatt-hour in March at the beginning of the Russian invasion of Ukraine, it fell last week by more than a third within a week, to be traded again on Monday.
On the other hand, indicators indicate a sharp decline in European stock exchanges on Monday, according to Scholar, due to the uncertainty surrounding economic prospects due to the tension over energy supplies.
The current conditions in the long run contribute to the weakening of the euro, with high energy prices undermining consumers’ budgets and threatening to shrink the economies of European countries.
On the other hand, the dollar is constantly strengthening, benefiting from its status as a haven currency.
And the pound sterling fell, due to Britain’s exposure to fluctuations in the price of gas, the energy source it relies on to a large extent.
The British currency lost 12% to $1.1479, its lowest level since the imposition of the quarantine in March 2020 and the shock of the Corona epidemic.