Euro Slides to New Lows in 2022 on Surging Oil Prices and Geopolitical Tensions

Euro weakens to lowest level this year near $1.05, down 3% in Q3, on track for third straight year of losses due to high oil prices weighing on euro area economy.

Analysts say euro is vulnerable to rising oil prices given EU's high net imports, with some not ruling out a move to parity if oil hits $100-110 per barrel.

Euro also faces headwinds from geopolitical risks hurting bloc's competitiveness and Italy's fiscal worries pushing up its bond yields.

Weak euro helps exporters but also lifts import costs, adding to inflation pressures and possibly requiring ECB attention.

Hawkish Fed and unwinding of euro long positions add to downward pressures, even as euro upside could be limited if U.S. economy slows.