Euro Sinks as European Gas Prices Reach Multi-Year High
The euro has come under pressure as European gas prices reached a multi-year high on Monday. The Dutch TTF, the wholesale European benchmark, climbed from €80/MWh to €84, with regional officials estimating that repairs to the Saudi East-West pipeline could take three to five weeks.
Natural gas is now around 85% above its late-April level, according to Berenberg. This has significant implications for the Eurozone economy, which has a large manufacturing and industrial component. The move in gas prices is euro-specific, as Europe buys most of its gas from abroad and pays for it in dollars.
Fawad Razaqzada, Market Analyst at StoneX, noted that 'energy shock undermines EUR while USD gains further ground.' Rabobank expects gas to keep power prices high into 2027 due to low gas storages and disrupted Gulf LNG flows.