Euro decrease continues with second fall below parity

The strengthening dollar combined with anticipated challenges of the upcoming winter takes its toll on the euro. The european currency has again fallen below parity, which is already the second time in recent months. Experts suggest it to be the beginning of a significant and prolonged decline.

The current change is connected with the fact that traders focused their attention on concerns over the cut in supplies of Russian gas to Europe, which might worsen the inflation and cause an overall recession in the region.

According to Morgan Stanley forecasting, it’s likely for the euro to decline further up to the level of $0.97, which hasn’t been reached in almost 20 years. Nomura International Plc, in its turn, expects the euro to fall down to the level of $0.975 by the end of the next month, or even lower. The further decline is also possible due to risks of blackouts getting higher because of the increased pressure on energy supplies, which might lead to the rise of euro imports.

As it was said by Kit Juckes, a foreign exchange strategist at Societe Generale, the euro is now under pressure again, which is connected with a growing demand for the dollar and the economic situation in Europe getting more and more complicated.