By Sam Boughedda
Macro hedge fund EDL Capital is betting on the euro hitting 80 U.S. cents, according to a report by Bloomberg.
That would mean the currency hits levels not seen in over 20 years, since the early days of its inception, with soaring inflation and political and bond market instability impacting the currency and region. Those factors and a strengthening US dollar saw the EURUSD fall below parity earlier this month.
Earlier today, EU member states had agreed on a 15% energy reduction plan due to Russian energy supply fears.
Bloomberg said EDL Capital is betting that there will be a "euro bear market," with Russian gas supply risks driving up record inflation, resulting in aggressive rate hikes from the ECB at a time of recession, which will cause Germany to potentially reconsider the costs of keeping the eurozone together.
A letter from Edouard de Langlade, the founder of EDL, reportedly says, "Europe is on the brink of disaster."
"We could move to a place where the dollar is not strong against everything but the euro gets weak against everything," he added, with Bloomberg stating he is targeting the euro at 80 U.S. cents.