Published on 5/07/2022 3:08:15 PM | Source: Reuters
Follow us Now on Telegram ! Get daily 10 - 12 important updates on Business, Finance and Investment. Join our Telegram Channel https://t.me/InvestmentGuruIndia
Download Telegram App before Joining the Channel
The euro slumped to a two-decade low on Tuesday as the latest surge in European gas prices added to worries about a recession, while there was no stopping the dollar as U.S. Treasury yields staged a rebound.
Swathes of currencies were under pressure. The euro's 0.8% early drop took it to its weakest since the end of 2002, Japan's yen was near 24-year lows again, while Norway's crown slumped 1% as its gas workers went on strike.
MUFG's head of global markets research, Derek Halpenny, said the risks of Europe backsliding into a recession looked to be growing after another big 17% jump in natural gas prices in both Europe and in Britain.
Concerns about how the European Central Bank will react were also gnawing at sentiment after German Bundesbank chief Joachim Nagel had hit out at the ECB's plans to try and shield highly indebted countries from sharp rises in borrowing rates.
"It will continue to be very difficult for EUR to rally in any meaningful way with the energy picture worsening and risks to economic growth increasing notably," said MUFG's Halpenny.
Even the Australian dollar failed to gain traction despite the country's first back-to-back 50 basis point interest rate hike in recent memory overnight, which also cemented the fastest run up in rates there since 1994.
The Aussie ticked 0.09% lower to $0.6820, after trading as high as $0.6895 earlier in the day.
"We have had so many central banks hiking in these big increments that you are now getting talk of reverse currency wars," said Rabobank FX strategist Jane Foley, referring to where central banks need to hike rates just to stop their currencies from falling.
"It could get concerning" for a number of currencies she added, especially if the U.S. Federal Reserve pushes ahead with large rate hikes in the coming months as expected.
The dollar's strength, meanwhile, sent the yen back down toward a 24-year low. It was last at 135.79 per dollar.
Buy G R Infraprojects Ltd For Target Rs. 1,630 - Motilal Oswal
Market Roundup : Global as well as domestic markets gained strongly post soft US inflation data Says Mr. Siddhartha Khemka, Motilal Oswal
Hold Somany Ceramics Ltd For Target Rs.730- ICICI Direct
Rupee depreciates 12 paise to close at 79.64 against US dollar