The euro fell below the USD equivalent for the second time in just over a month on August 22 as investors worried about the recession of the European common currency area increasing.
The euro fell to its lowest level of 0.9935 USD at one point on August 22, before gaining slightly. This is one of the lowest levels in two decades after rising to around $1.03 at the beginning of this month. The euro was traded at around $1.15 in February.
Bloomberg quoted Societe Generale SA foreign exchange strategist Kit Juckes as saying: At the end of the summer, the euro will be under pressure again, partly due to the rising USD, partly because the river of Damocles hanging on the European economy will not disappear. Damocles youth is a metaphor often used by Westerners to describe an impending danger.
The euro has recently shown a steady downward trend due to concerns about a recession in the growing European common currency area amid uncertainty about Russia's energy supply. In July, for the first time the euro hit a level playing with the USD since 2002.
According to Morgan Stanley, the euro could slide to $0.97 in the quarter, a level not seen since the early 2000s. Meanwhile, Nomura International forecasts the euro will fall to $0.975 by the end of September, which could then fall further to $0.95 or lower, as pressure on energy supply increases the risk of power outages and could require the common currency region of Europe to increase energy imports.
Meanwhile, Polish Foreign Minister Zbigniew Rau said that the EU needs a reform that could allow member countries to abandon the euro and return to their national currencies.
Equality among member states requires restoring equal opportunities for their development, which will lead to reforming the common currency sector of Europe. The extreme levelism of this reform cannot rule out any solution, such as... allowing some members of the European common currency region to temporarily or permanently return to using national currencies, Polish Foreign Minister Zbigniew Rau said in an interview with Rzeczpospolita on August 22.
The head of Poland's ruling Justice and Law Party, Jaroslaw Kaczynski - who served as Polish Prime Minister from July 2006 to November 2007 - previously said that the transition to the euro would lead to the apartheid of the Polish people.
Poland joined the European Union in 2004 but has not used the euro as its currency. Although the treaty requires all new EU members to join the common monetary region, they have the right to postpone the application of the common currency, as Poland has done. However, Poland is still expected to replace the zlity with the euro in the end.
The Polish government has repeatedly opposed joining the European common currency area in the near future, stressing that Poland must maintain its independence and sovereignty.
