Goldman Sachs: Duration of Energy Price Shocks Key for Select European Currencies

Deep News
03/05

Goldman Sachs analysts stated in a report that for currencies of European energy importers to experience more sustained weakness, markets may need to reflect expectations of longer-lasting disruptions to natural gas prices resulting from the Middle East conflict. They noted that compared to the surge in oil and gas prices following Russia's invasion of Ukraine in 2022, the current European gas market reflects an anticipation that the current energy price shock will be more short-lived. The analysts indicated that this perception would need to shift in order to observe more prolonged depreciation in currencies of European energy importers, including the euro, British pound, Hungarian forint, Polish zloty, and Czech koruna. The Hungarian forint and Polish zloty were described as the currencies "seen as most vulnerable to energy price increases."

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