Adrien Fillon | Nurphoto | Getty Images The euro has fallen below $0.99 for the first time in 20 years after Russia said it would indefinitely shut down Europe’s main natural gas pipeline. The euro was trading just below the 0.99 level as European markets opened on Monday, trading at 0.9893 against the dollar shortly after 8:00am. London time (3:00 a.m. ET). Earlier in the morning, it hit a low of around $0.9881. The dollar index, which measures the greenback against six major currencies, also hit a new two-decade high as the British pound weakened on fears over energy supplies and European economic growth. On Friday, Russian energy supplier Gazprom said it would not continue supplying natural gas to Germany through the main Nord Stream 1 pipeline, blaming a turbine malfunction. The announcement came hours after the Group of Seven economies agreed on a plan to impose a price ceiling on Russian oil. It comes ahead of the European Central Bank’s meeting on Thursday, when economists expect it to raise its key deposit rate from zero to 0.5% or 0.75% amid concerns about Europe’s ability to meet its energy needs this in the winter and the potential blow to growth. “We expect Russia to respect the contracts it has, but even if the weaponization of energy continues or increases in response to our decisions, I think the European Union is ready to react,” said Paolo Gentiloni, the EU’s finance commissioner. he told CNBC over the weekend. Meanwhile, the pound was trading at 1.1465 against the dollar as the UK prepares to find out who will be the new British Prime Minister. The new prime minister will be forced to reckon with the growing cost of living crisis fueled by rising energy bills. Sterling fell 4.5% against the dollar in August, its worst month since Brexit, and one analyst predicted it would “sink to new depths” amid political and economic uncertainty, potentially hitting $1.05 by the middle of next year year.
