EUR/USD has dropped below 1.04 again. Economists at MUFG Bank note that further concerns over energy supply in Europe and fragmentation risk in the eurozone are weighing on the shared currency.

Energy supply and eurozone fragmentation risks in focus

“Significant energy supply disruptions to major euro-zone economies continue to pose the main downside risks to the euro and could trigger a deeper slowdown in regional growth.” 

“The reemergence of fragmentations risk has provided an additional downside risk for the euro in the near-term, and it is important that the ECB continues to take action to address it effectively.”