On Tuesday, the euro saw its lowest point in two decades against the dollar, as a result of resurgent worries that an energy crisis will keep prices high and virtually drive Europe into a recession.
The value of the Chinese yuan fell to a two-year low, and the value of the pound briefly surpassed March 2020 lows.
The euro was able to recover from the 20-year low of $0.99005 set early in the day as business activity figures from Europe were not as dismal as anticipated.
The likelihood of maintenance on the main Russian pipeline to Europe caused markets to tremble on Monday, which resulted in a substantial increase in British and Dutch wholesale gas prices. The Nord Stream 1 pipeline will be shut down by Russia for three days at the end of the month, the latest illustration of how unstable the continent’s energy supply is.
Energy supply has already been strained by the continent’s heat waves, and concerns are rising that any disruption during the winter months may be disastrous for business activity.
“Given the current mood, there’s obviously concerns as to whether that’s going to be three days or whether it’s going to be three years,” said Ray Attrill, head of FX strategy at National Australia Bank (NAB).
The Japanese yen moved up to 137.24 per dollar after striking a one-month low of 137.705 earlier in the day, while the pound was driven to a new 2-1/2-year low of $1.1718.
The risk-averse Australian dollar dropped to a one-month low before rising to about $0.6888.
China’s yuan dropped to an almost two-year low of 6.8666 per dollar elsewhere in Asia.