Brussels: Due to the Russia-Ukraine conflict, the energy crisis in Europe is intensifying. This has put pressure on the Euro. On Tuesday, the Euro fell to a two-decade low against the US dollar. US financial institution Citibank has predicted the Euro would slide further in the coming times. Analysts claimed that the further fall in the Euro, coupled with the energy crisis, will lead the economy of Europe into recession.

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The Euro fell by 1% to trade at 0.9905 to 1 USD on Tuesday, which marked the lowest level since 2002. Factors such as the Russia-Ukraine conflict, the energy crisis, the rise in inflation, shocks in the Chinese economy and the rate hike by the US central bank are said to have contributed to the fall of the Euro. Following the Euro, the British pound and the Chinese yuan have also fallen.

European countries supporting Ukraine in the Russia-Ukraine conflict are facing the impact of heavy sanctions imposed on Russia. Inflation has hit record highs in Europe, while the fuel and electricity prices have more than doubled in a year. At the same time, the economy of China, which is Europe’s largest trading partner, is receiving successive setbacks. The major impact of this is being seen in European countries.

Leading European countries, which are major economies like Germany, France, and Italy, have reported a decline in exports. The manufacturing sector in Europe has reported a decline for the last two months, and the index has been at the lowest level since February 2021. On the other hand, the United States has raised interest rates by nearly 2% to counter inflation. Due to this, the investment in the US dollar has increased while the Euro has been adversely impacted. The US financial institution has predicted the Euro to depreciate more against the USD soon.

Analysts have claimed that the economy of the European Union is likely to slide into recession due to the growing extent of the energy crisis, rise in inflation, production slowdown, fall in exports, and depreciation in the Euro. The German central bank has also confirmed this and said that the German economy is heading into a recession.

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