Euro close to two-decade low against US dollar

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Euro Close To Two-Decade Low Against Us Dollar Euro Close To Two-Decade Low Against Us Dollar
The euro fell below 99 cents on Wednesday. Photo: Dan Kitwood/Getty
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By Alun John and Gertrude Chavez-Dreyfuss

The dollar surged to a 37-year high versus sterling as Europe's economic problems contrasted with a relatively stronger American economy and a hawkish US Federal Reserve determined to bring down inflation to its 2 per cent inflation target.

Against sterling, the US currency hit $1.1407, the lowest since 1985 and last down 0.8 per cent at $1.1425.

The euro fell below 99 cents on Wednesday after dipping as low as $0.9864 on Tuesday, its lowest since October 2002.

Europe's single currency was last up 0.3 per cent at $0.9930.

The European Central Bank is seen as more likely than not to deliver a massive 75 basis-point (bp) rate hike on Thursday, but these expectations are doing little to support the currency in the face of a battered European economy and Russia's decision to keep the key Nord Stream 1 gas pipeline shut indefinitely.

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In contrast, a report overnight showed the US services industry unexpectedly picked up last month, supporting the view that the economy is not in recession.

Cryptocurrency bitcoin slumped to the lowest since June 19th at $18,540, extending a 5 per cent tumble from Tuesday. But it was last up 0.7 per cent at $18,920.

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