- The euro could fall further if Russia completely cuts off Europe from its oil.
- That's according to Kaspar Hense who told Bloomberg that he expects the euro to slip to $0.90.
- "It's all about Russia," he said.
The euro could fall to $0.90 against the dollar if Russia cuts off its oil from Europe, a portfolio manager told Bloomberg Wednesday.
Kaspar Hense, senior portfolio manager at BlueRay Asset Management, said he sees the euro declining if Europe starts rationing energy which will also trigger a recession, though he noted such a scenario was not his base case.
"It could be a very long winter," Hense told Bloomberg.
Hense's comments come as the euro fell to a new 20-year low on Tuesday as markets weighed growing fears of recession. European inflation hit a record-high in June, running at 8.6%, which pushed the European Central Bank to aggressively raise rates.
Traders have remained cautious on the euro because the ECB hasn't taken steps to raise rates as aggressively as the Federal Reserve. In essence, the euro is "unbuyable this summer" according to Kit Juckes, chief global currency strategist at Societe Generale who spoke to Bloomberg.
And Hense isn't alone in seeing a further decline in the euro. Deutsche Bank's George Saravelos said in note Thursday that the German bank expects the euro to slip to a range between $0.95 to $0.97 against the dollar.
"Continued (partial) supply of Russia gas through the summer would in our view not be enough as the risks of a shutdown would persist in to winter," the note said.