Euro hovers near 20-year low on recession worries

The euro hovered near a two-decade low against the dollar on Thursday as Europe’s energy woes cast a long shadow over the economic outlook.

The euro was about flat at $1.01845 after sinking as low as $1.01615 on Wednesday, for the first time since late 2002, Reuters reports.

The dollar index – which measures the currency against six peers including the euro, sterling and yen – held close to a 20-year peak at 107.27 reached overnight, last changing hands at 107.03.

German Chancellor Olaf Scholz said the country must move faster in its green energy transition with Russia using energy as a political weapon amid the war in Ukraine.

“U.S recession risk will periodically undercut the dollar, but Europe’s energy cost squeeze is a greater threat to the Eurozone growth outlook,” Westpac strategists wrote in a client note.

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