Euro slumps to two-decade lows against dollar as energy crisis bites

LONDON (Reuters) – The euro hit a fresh two-decade low on Tuesday, dealt a fresh blow by renewed concern that an energy shock will keep inflation elevated and makes a recession in Europe all but certain.

China’s yuan weakened to a two-year low, while sterling briefly touched its weakest since March 2020.

Business activity data from Europe was not as bad as feared, pushing the euro off the 20-year low hit early in the session, at $0.99005.

But by 0820 GMT, the currency was still down 0.15% at $0.9930 and holding below the key $1-level.

“What we’re trying to figure out is how much of the move in the euro is driven by thin summer liquidity and how much is driven by flows,” said Kenneth Broux, a currency strategist at Societe Generale in London.