For the first time in 20 years, the exchange rate between the euro (EUU) and the US dollar has reached parity – meaning the two currencies are worth the same.
The euro hit $1 on Tuesday, down about 12% since the start of the year. Fears of recession on the continent abound, stoked by high inflation and energy supply uncertainty caused by Russia’s invasion of Ukraine.
The European Union, which received roughly 40% of its gas through Russian pipelines before the war, is attempting to reduce its dependence on Russian oil and gas. At the same, Russia has throttled back gas supplies to some EU countries and recently cut the flow in the Nord Stream pipeline to Germany by 60%.
Now that critical piece of gas import infrastructure in Europe, has been shut down for scheduled maintenance due to last 10 days. German officials fear that it may not be turned on again.
Gold is continuing its retreat as Russia underpins the Ruble with it.
Remember - a strong US dollar is a negative on US stocks (and makes European stocks relatively cheap).
The coil of the spring is being wound.