The euro fell 0.70% to $0.9884 by 7:35 a.m. CEST on Monday, its lowest level since December 2002. The European currency has weakened against the dollar since the beginning of the year due to economic turbulence and uncertainty caused by Russia’s invasion of Ukraine. European shares also headed lower on Monday morning, down around 3%, as the continent’s worsening energy crisis fueled fears of high inflation and central bank monetary tightening. European gas prices hit records Russia’s Gazprom last week indefinitely halted gas transport through its key pipeline to Europe after the leaders of the G7 (the world’s seven most advanced economies) agreed to impose a price cap on Russian oil as the Kremlin continues to war in Ukraine. Gazprom justified this by the leakage of engine oil on the turbine at the Portovaja compressor station. Natural gas prices in Europe are reaching records. Governments are considering special measures to curb energy costs. Increasing interest rates Germany plans a package of 65 billion euros to protect consumers. Monetary committees of central banks around the world, including the European Central Bank (ECB), are set to raise interest rates to fight hyperinflation despite a worsening outlook for the global economy. The accompanying rise in real yields – considered the true cost of money to borrowers – represents a drag on various risky assets.