Yesterday the euro fell to a 20-year low of $0.993 to the dollar, and it’s expected to drop further—parity is now in the rear-view mirror. Reuters ascribes this to “renewed concern that an energy shock will keep inflation elevated and makes a recession in Europe all but certain…. British and Dutch wholesale gas prices rose sharply on Monday [Aug. 22] as the prospect of maintenance on the main Russian pipeline to Europe put markets on edge.”
Another bucket of cold water came after German Chancellor Olaf Scholz’s meeting with Canada’s Prime Minister Justin Trudeau in Montreal on Aug. 22, when Trudeau announced that Canada would not agree to be a replacement for lost Russian natural gas previously exported to Germany. And S&P Global reports that France’s economic output is declining for the first time in a year and a half, following in the footsteps of Germany.
