News that Russian gas flows will not resume due to an unexpected oil leak from a Nord Stream 1 turbine sent the euro tumbling.
The euro fell this Monday to his minimum value against the dollar for twenty yearsbelow $0.99, after Russia again cut off gas supplies, the price of which has soared in Europe.
The euro was trading at $0.9930, down from $1.0014 in late European forex trading the previous day.
The European Central Bank (ECB) set the benchmark exchange rate for the euro at $0.9920.
“The news that Russian gas flows will not resume due to an unexpected oil leak in a Nord Stream 1 turbine caused the euro to collapse on Friday from the maximum reached after the negotiations”, comment the analysts of Monex Europe.
Oil prices have also risen sharply after the OPEC+ alliance, led by Saudi Arabia and Russia, agreed on Monday to reduce oil supply by 100,000 barrels per day.
The energy crisis forces many companies to interrupt their production and pushes the euro area economy into recession.
Eurozone economic figures already show a more pronounced contraction in August.
The final composite index of total activity in the euro area, manufacturing and services, stood at 48.9 points in August (49.9 points in July), its lowest in 18 months, according to S&P Global, which now integrates IHS Markit.
Business activity in the euro zone registers a contraction for the second consecutive month because the services sector also contracted, especially in Germany.
The final index of commercial activity for the services sector in the euro area stood at 49.8 points in August (51.2 points in July), a 17-month low.
A value below 50 points indicates a contraction in economic activity.
The single currency was traded in a trading band between $0.9879 and $0.9943.