The euro slid to a new 20-year low on Friday, trading below 97 cents against the US dollar, the steepest decline in two decades as the energy crisis in Europe compounds the effects of surging inflation and a potential win by a right-wing party in Italy's coming polls rattles investor confidence.
The single currency, which came into physical circulation in 2002, slumped to $0.9690 against the greenback.
The euro has been trading below or near parity since mid-August and has dropped about 15 per cent against the dollar this year.
It has been dragged down by record-high inflation, low consumer confidence and the energy crisis amid a face-off between Europe and Russia over Moscow's war in Ukraine.
The collapse in July of Mario Draghi’s government, which had restored Italy's influence and credibility, and the coming polls this Sunday may bring to power a right-wing party that has campaigned on an anti-EU platform.
The euro "remains under pressure ahead of the Italian election ... the polls give more chance for a right-wing win, as the right wing could join forces, with Berlusconi back on headlines, while the left’s inability to cooperate gives them no chance of winning this", said Ipek Ozkardeskaya, a senior analyst at Swissquote Bank.
"As a result, the far-right Fratelli d’Italia party is expected to win a majority of the vote and the vote will be a major political shift for Italy – a pivotal country for the EU and not toward the ‘right’ direction."
On Thursday, European bonds weakened with the 10-year bond yield gaining 7 basis points to 1.958 per cent, while the 10-year French bond yield gained 8 bps to 2.517 per cent.
Monetary tightening by central banks globally to tame inflation and a strengthening US dollar that has reached a record high this year has also put pressure on the euro and other major currencies.
"We think the dollar bull market is not over yet," said Mark Haefele, the chief investment officer at UBS Global Wealth Management.
"The US is in the singular position of having both high inflation and more resilient economic growth than some of its peers, meaning the Fed has both the cause and the licence to increase interest rates further and faster than other major central banks, expanding the US dollar’s interest rate advantage.”
UBS expects the euro to weaken relative to the US dollar and hold a least preferred stance on the British pound, which hit a 37-year low against the greenback on Friday to trade at $1.0850. The currency has lost about 20 per cent of its value against the greenback this year.
Critics have said the European Central Bank was too slow to act in fighting soaring inflation levels and was playing catch up given weak economic indicators.
The release of eurozone purchasing managers index (PMIs) on Friday showed that business conditions deteriorated further in September, piling on more pressure on the currency.
The S&P Global flash eurozone composite PMI fell to a 20-month low, sliding to 48.2 from 48.9 in August. This is the third consecutive reading below the 50 mark that separates growth from contraction. A reading below 50 indicates deteriorating conditions.
The euro area annual inflation rate was 9.1 per cent in August 2022, up from 8.9 per cent in July. A year earlier, the rate was 3.0 per cent. EU annual inflation was 10.1 per cent in August 2022, up from 9.8 per cent in July.
The ECB raised its key interest rates by an unprecedented 75 bps on September 8 and indicated further increases are coming as Europe is likely to slide into a recession.
Earlier this month, the Institute of International Finance said it expected the euro's decline against the US dollar to continue amid record inflation, an energy crunch in Europe and a looming recession.
“Markets are increasingly focused on recession ... it is unlikely that ECB hiking will prevent the euro from falling further, not least since speculative positioning remains close to flat for the single currency. The euro is, therefore, likely to keep falling,” the IIF said.
The eurozone area is not expected to avoid a recession, given the deterioration in economic indicators, with growth estimated at 1 per cent in 2022, the IIF said.
It said the sharp deterioration in the eurozone trade balance reflected the immediate hit from the large rise in energy prices, and that the bloc's reliance on cheap Russian energy required “a retooling of the eurozone growth model, [which] will take time and weigh on growth in coming years”.
Sui Dhaaga: Made in India
Director: Sharat Katariya
Starring: Varun Dhawan, Anushka Sharma, Raghubir Yadav
3.5/5
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Read more about the coronavirus
OPINIONS ON PALESTINE & ISRAEL
Company Profile
Founder: Omar Onsi
Launched: 2018
Employees: 35
Financing stage: Seed round ($12 million)
Investors: B&Y, Phoenician Funds, M1 Group, Shorooq Partners
Quick pearls of wisdom
Focus on gratitude: And do so deeply, he says. “Think of one to three things a day that you’re grateful for. It needs to be specific, too, don’t just say ‘air.’ Really think about it. If you’re grateful for, say, what your parents have done for you, that will motivate you to do more for the world.”
Know how to fight: Shetty married his wife, Radhi, three years ago (he met her in a meditation class before he went off and became a monk). He says they’ve had to learn to respect each other’s “fighting styles” – he’s a talk it-out-immediately person, while she needs space to think. “When you’re having an argument, remember, it’s not you against each other. It’s both of you against the problem. When you win, they lose. If you’re on a team you have to win together.”
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
MOUNTAINHEAD REVIEW
Starring: Ramy Youssef, Steve Carell, Jason Schwartzman
Director: Jesse Armstrong
Rating: 3.5/5
2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, (Leon banned).
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
More coverage from the Future Forum
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RESULTS
2.15pm: Al Marwan Group Holding – Handicap (PA) Dh40,000 (Dirt) 1,200m
Winner: SS Jalmod, Antonio Fresu (jockey), Ibrahim Al Hadhrami (trainer)
2.45pm: Sharjah Equine Hospital – Maiden (PA) Dh40,000 (D) 1,000m
Winner: Ghallieah, Sebastien Martino, Jean-Claude Pecout
3.15pm: Al Marwan Group Holding – Handicap (PA) Dh40,000 (D) 1,700m
Winner: Inthar, Saif Al Balushi, Khalifa Al Neyadi
3.45pm: Al Ain Stud Emirates Breeders Trophy – Conditions (PA) Dh50,000 (D) 1,700m
Winner: MH Rahal, Richard Mullen, Elise Jeanne
4.25pm: Sheikh Mansour bin Zayed Al Nahyan Cup – Prestige Handicap (PA) Dh100,000 (D) 1,200m
Winner: JAP Aneed, Ray Dawson, Irfan Ellahi
4.45pm: Sharjah Equine Hospital – Handicap (TB) Dh40,000 (D) 1,200m
Winner: Edaraat, Antonio Fresu, Musabah Al Muhairi
UAE currency: the story behind the money in your pockets
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
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The view from The National
The Book of Collateral Damage
Sinan Antoon
(Yale University Press)
Bullet%20Train
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UAE currency: the story behind the money in your pockets
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The biog
Favourite book: You Are the Placebo – Making your mind matter, by Dr Joe Dispenza
Hobby: Running and watching Welsh rugby
Travel destination: Cyprus in the summer
Life goals: To be an aspirational and passionate University educator, enjoy life, be healthy and be the best dad possible.
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UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
Q&A with Dash Berlin
Welcome back. What was it like to return to RAK and to play for fans out here again?
It’s an amazing feeling to be back in the passionate UAE again. Seeing the fans having a great time that is what it’s all about.
You're currently touring the globe as part of your Legends of the Feels Tour. How important is it to you to include the Middle East in the schedule?
The tour is doing really well and is extensive and intensive at the same time travelling all over the globe. My Middle Eastern fans are very dear to me, it’s good to be back.
You mix tracks that people know and love, but you also have a visually impressive set too (graphics etc). Is that the secret recipe to Dash Berlin's live gigs?
People enjoying the combination of the music and visuals are the key factor in the success of the Legends Of The Feel tour 2018.
Have you had some time to explore Ras al Khaimah too? If so, what have you been up to?
Coming fresh out of Las Vegas where I continue my 7th annual year DJ residency at Marquee, I decided it was a perfect moment to catch some sun rays and enjoy the warm hospitality of Bab Al Bahr.
David Haye record
Total fights: 32
Wins: 28
Wins by KO: 26
Losses: 4
HOW TO WATCH
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Adele: The Stories Behind The Songs
Caroline Sullivan
Carlton Books
Fifa Club World Cup quarter-final
Kashima Antlers 3 (Nagaki 49’, Serginho 69’, Abe 84’)
Guadalajara 2 (Zaldivar 03’, Pulido 90')
2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, Leon.
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
