On Wednesday, the dollar made up for some losses from data releases and rebounded towards recent peaks, while the euro remained under pressure amid growing recession fears fueled by a potential energy supply crisis.
The dollar took a breather after disappointing surveys of the services and manufacturing sectors in the United States, which were revealed on Tuesday, as well as a decline in new home sales, this comes after a rally that pushed the greenback to the strongest level against the euro in 20 years.
But Europe has its own growth concerns stemming from its greater exposure to Russian gas supplies as the region seeks to replenish stocks before winter.
On Friday, Russian energy company Gazprom said Russia would halt supplies of natural gas to Europe for three days through the Nord Stream 1 pipeline due to maintenance work.
The euro briefly hit $1 on Tuesday, but came back under pressure to $0.9950 in early European trade, slightly above yesterday’s low of $0.99005.
“It is very difficult for the market to push the euro above parity,” said Simon Harvey, head of foreign exchange analysis at Monex Europe, attributing this to concerns about energy supplies in Europe and the potential for a tightening tone from the Federal Reserve at Friday’s Jackson Hole meeting.
The dollar index, which measures the performance of the US currency against a basket of six currencies, rose 0.1% to 108.66, close to the 20-year peak recorded in July at 109.29.
Meanwhile, highly cyclical currencies such as the Australian and New Zealand dollars have come under pressure amid fears of slowing global growth.
The Australian dollar fell 0.15% to $0.6920 and its New Zealand counterpart fell 0.23% to $0.6199.
The pound hovered above a two-and-a-half year low of $1.1718 hit on Tuesday, while the Japanese yen rose 0.2% to 136.48 per dollar.