After breaching parity last week for the first time in twenty years, the downtrend in the EUR/USD pair has taken a pause but is still hovering around the lows ahead of a crucial Thursday when the gas flow from the Nord Stream pipe to Germany from Russia is supposed to resume.
The event is also casting its shadows on European Central Bank policymakers who are scheduled to meet later this week to hike rates by 25 bps for the first time in years.
The Fear: The pipeline transports 55 billion cubic meters of gas from Russia to Germany, annually. According to Deutsche Welle, Russian gas supplier Gazprom PGSC OGZPY is conducting maintenance over a 10-day period but there are fears among European countries whether Russia could use this to stop gas deliveries in response to the sanctions slapped by the West.
Gazprom’s Statement: The firm said in a statement that it expects the Siemens Group to unconditionally fulfill its obligations on the maintenance of the gas turbine engines that are essential for the reliable operation of the Nord Stream gas pipeline and natural gas supplies to European consumers.
Currency Movement: The EUR/USD was last trading close to 1.0086 and is consolidating between the 1.012 and 0.995 levels. Thursday’s newsflow regarding the Nord Stream gas flow resumption and the ECB meet outcome would be key triggers.
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