More aggressive tightening measures from the European Central Bank (ECB) may not be able to save the euro from the effects of the deepening energy crisis.
The euro has plunged below 0.9900 against the US dollar for the first time since late 2002 after Russia cut off natural gas supplies through a major pipeline to Europe.
Focusing on investors for the euro next is the ECB's policy meeting which will take place on Thursday.
The central bank is widely expected to raise interest rates by 75 basis points this week, with some policymakers signaling to implement more aggressive hikes at the September meeting.
Even so, analysts think it will not help the currency to bounce back.
Strategists at the Barings Investment Institute say this big rate hike will do nothing to save the euro, amid a looming recession and unbridled geopolitical concerns.
Goldman Sachs predicts the euro will weaken to $0.97 and remain low for the next six months as demand destruction caused by the gas crisis prompts a deeper and longer contraction.
Meanwhile, Capital Economics revised down its forecast for the euro to fall to $0.90 next year, down 9% from current levels.
The euro has been inversely linked to gas prices for months, where it tends to fall when energy prices rise.
For the record, gas prices have jumped 255% in 2022 and on Monday they increased 30%.
