On the Russian exchange, the US dollar was trading higher than the euro. This renders the dollar stronger than the euro for first time in 20 years.
On Tuesday, the euro dropped under the US dollar on the Moscow Exchange as investors worried that the oil crisis will push the European Union into a recession.
As of 10:56 GMT, the euro was trading at 58.52 rubles per euro, while the dollar-ruble exchange rate was 58.70.
The euro edged closer to parity with the dollar on global exchanges. The euro fell to only 1.0001 to the dollar in tumultuous forex trade, marking its lowest point in 20 years. As a result of the spike in energy prices brought on by the conflict in the Ukraine and the sanctions imposed on Russia, the continent’s main energy supplier, the euro has lost 12 percent of its value versus the dollar so far this year.
According to Yegor Zhilnikov, head analyst at the Economic and Industry Analysis Department of Promsvyazbank, “for the first time in 20 years, parity has formed between the euro and the dollar as the US currency continues to rise in anticipation of the tight monetary policy of the Federal Reserve.” “We believe that until the ECB meeting {on July 21}, the dynamics may continue, and the dollar will become more expensive than the European currency,” he stated.
The pressure on the single currency has increased as concern about Russian gas supplies grows. For routine summer maintenance, Gazprom shut off the Nord Stream 1 pipeline that transports gas to the continent on Monday. According to the operator, the renovations, which will last through July 21, were planned in advance and approved by all parties.
“Fears are rising that Russia may not switch the gas supply back on in 10 days when the works are over,” Fiona Cincotta, senior financial markets analyst at City Index, told The Guardian. “This could cause a recession in Europe,” she said.
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