The euro hit a five-year low after Russia shut down gas.Stock Stage Small Rebound

London — The euro has fallen to its lowest since Wednesday 2017, after Russia cut off gas supplies to Bulgaria and Poland amid growing investor concerns about the local economy.

Russia’s decision to cut gas flows to Bulgaria and Poland because it refused to pay in the ruble directly aimed at the European economy, increasing the euro’s predicament and giving investors more reason to soar the US dollar. I did.

The dollar surged more than 4% in April and is well on its way to the highest month since January 2015. This was driven by rising expectations that the Federal Reserve will aggressively raise interest rates in the coming months and the US economy will remain better than the euro area. ..

Investors have dumped the euro, dropping another 0.5% to below $ 1.06 on Wednesday. Analysts say Europe’s common currency is suffering from the war in Ukraine, raising concerns that Brock’s economy will be in recession this year.

“The euro’s blatant helplessness against hawkish comments by members of the European Central Bank means that Ukraine’s constant situation and general vulnerabilities to the external environment, which have been adversely affected by the strong US dollar, will continue. “The INGFX strategist wrote in a note to the customer.

The euro fell to $ 1.0586 before recovering to just above $ 1.06. The dollar index, which measures the US currency against rival baskets, rose 0.5% to 102.78. This is the strongest since March 2020, when investors competed for the dollar due to the market downturn caused by COVID 19.

European stocks initially fell before a gradual rebound, supported by a recovery in the Wall Street futures market following Tuesday’s sharp fall. On Tuesday, the tech-heavy Nasdaq 100 fell 3.3%. This is the lowest level since the second half of 2020.

News that Russia has cut off gas supplies to Poland and Bulgaria has hit MSCI’s global equity index at its 13-month low.

View shows the pipeline of a gas treatment facility operated by Gazprom on May 21, 2019 in the Bovanenkov gas field on the Yamal Peninsula, Russia. (MaximShemetov / Reuters)

By 1100 GMT, the Euro STOXX 600 rose 0.97 percent, while Germany’s DAX rose 0.56 percent. The UK FTSE 100 rose 0.96%.

Investor sentiment overnight with various corporate earnings, including Google’s parent company Alphabet Inc. reporting a mistake in Pandemic’s first quarter earnings and Microsoft forecasting double-digit earnings growth for the coming year. Squeezed.

European corporate earnings announced on Wednesday were also mixed. Credit Suisse reported another quarterly loss, and Deutsche Bank warned that the conflict between Russia and Ukraine could hurt annual earnings.

Investors are focusing on results from some of Wall Street’s biggest names this week and hope they can counter the flood of negative news that smashed stocks.

MSCI’s widest non-Japanese Asia Pacific stock index fell 0.75%, reaching its lowest level since mid-March, boosting sales in Asia. The Nikkei Stock Average in Tokyo fell 1.17%.

Australia’s stocks fell 0.78% as inflation hit a 20-year high, approaching a rise in interest rates.

The hit Chinese stocks went against this trend, rising almost 3% as sentiment was boosted in the short term by data showing that industrial profits grew faster than the previous year in March.

Chinese stocks fell to their lowest in two years on Tuesday as the continued blockade of COVID-19 could have a significant impact on economic activity and disrupt the global supply chain.

Concerns about the war in Ukraine and its impact on energy markets continue to upset investors.

Russia’s move to cut off gas supplies to Poland and Bulgaria from Wednesday was seen as a major escalation in response to Western sanctions on Moscow against the invasion of Ukraine, significantly raising oil and gas prices.

Brent crude futures rose only 0.15% to $ 105.15. Brent crude oil prices reached $ 140 in early March. US West Texas Intermediate Crude Oil futures rose 0.18% to $ 101.88.

In the currency market, the pound rebounded from its 21-month low, but the strong dollar left a nursing loss for the pound sterling and the Japanese yen.

Jeremy Stretch, Head of CIBC’s G10FX Strategy, said:

Gold prices fell and spot prices fell 0.48% on the day to trade at $ 1,897.

Tommy Wilkes