EUR/USD could test December 2002 lows as costly nat-gas prices and ongoing supply threats leave the eurozone facing elevated recession risks, which will weigh on the euro ahead, economists at CIBC Capital Markets report.

Recession risks to weigh on euro

“Costly natural gas prices and ongoing supply threats leave the eurozone facing elevated recession risks.”

“A data-dependent ECB may look to tighten again at its next meeting. However, recession concerns and fragmentation risks, due to rising credit concerns, point towards early December 2002 EUR/USD lows at 0.9863 remaining in view.”