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Weekly roundup: Euro rocked by closure of Nord Stream 1 pipeline

currency-newsWeekly roundup: Euro rocked by closure of Nord Stream 1 pipeline
The euro got off to a poor start last week as EUR investors were spooked by Russia’s decision to shut off the key Nord Stream 1 pipeline ‘indefinitely’.

The news propelled European gas prices to new highs at the start of Monday’s session, with the euro stumbling amid fears that gas shortages this winter could expedite a Eurozone recession.

The euro was quick to rebound in mid-week trade, however. The uptick in the single currency being underpinned by a stronger-than-expected Eurozone GDP release as it reinforced expectations the European Central Bank (ECB) would raise rates by 75bps at its upcoming policy meeting.

While the ECB did deliver a 75bps hike as forecast, the back’s accompanying macroeconomic projections applied some pressure to the single currency after the ECB slashed its 2023 Eurozone growth forecast.

This week has seen the euro storm higher, amid chatter that the ECB could follow September’s record rate hike with another 75bps increase at its next meeting.

However the single currency’s gains could be tempered later in the week, particularly in the wake of Germany’s latest ZEW survey as analysts forecast economic sentiment in the Eurozone’s largest economy will have continued to deteriorate this month.
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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