European Shares Open Lower; Euro Falls to 20-Year Low against Dollar

European stocks dropped sharply at the open on Monday, while the euro fell to a fresh 20-year low after Russia announced it will indefinitely shut off its main gas supply pipeline to Europe.

At 12:40 PM local time in Thailand, the euro was selling for $0.9884 per US dollar, up slightly from morning lows of about $0.9881.

The dollar index, which measures the greenback against six major currencies, hit a new two-decade high as the British pound fell on concerns about energy supply and European economic growth.

In early trade, the pan-European Stoxx 600 fell 1.49%, with autos losing 2.8% to lead losses as most sectors and major bourses plummeted further into negative territory. While most stocks were losing ground, oil and gas companies saw gains of 1.3% as prices once again rocketed.

European nations are set to discuss urgent bloc-wide measures on Friday (September 9) to respond to a spike in energy prices, including natural gas price caps and a halt of power derivatives trading, after Russia closed indefinitely its main gas supply pipeline to Europe.

On Saturday (September 3), Russia’s state-owned Gazprom decided at the last minute not to restart the key Nord Stream pipeline following maintenance. Russia’s latest move to cut off supply is expected to drive natural gas prices toward record highs not only in Europe, but also in Asia.