Euro Falls To Weakest Level This Year While Dollar Gains Show No Sign Of Easing

In this photo illustration, A salesman counts the money in the cash register in a market on April 4, 2022 in Berlin, Germany. (Photo by Hannibal Hanschke/Getty Images)

(Bloomberg) -- The euro fell to its weakest level this year as the dollar gained against all of its 10 major peers at the start of a new quarter of trading.

The common currency dropped as much as 0.9% against the dollar on Monday to $1.0478 — the lowest since December — extending a slide from a 16-month high reached in July, when the European Central Bank's tightening cycle was in full swing.

The moves were compounded in late afternoon trading in New York as a selloff in US Treasuries sent yields on 10-year notes up 11 basis points to 4.68% as of 4:51 p.m.

The euro has struggled to find its footing in recent weeks amid mounting speculation that the region's slowing economy can't withstand further interest-rate hikes. That's fueled chatter that the currency could once again fall to parity with the dollar.

“A move to parity would be unlikely before year end, but possible,” said Brad Bechtel, global head of foreign exchange at Jefferies LLC in New York. “If US 10-year yields go above 5% then EUR/USD could see parity.”

The euro's latest slide was driven by algorithmic sales as appetite for risk diminished amid rising US yields, according to a person familiar with the matter.

--With assistance from Anya Andrianova.

(Updates with context on European economy in fourth paragraph.)

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