Compared with the surge in European gas prices after Russia's invasion of Ukraine in 2022, the near-doubling in prices since June is relatively modest and seems less concerning for EUR/USD traders who are already betting on a drop.

In 2022, gas prices rose more than 30-fold, and the eurozone current account flipped from a large surplus to a substantial deficit. This year, by contrast, a large surplus has been maintained even as gas prices in Europe have roughly doubled. The price of natural gas in North America is unchanged.

Unsurprisingly, the impact on EUR/USD has been much more modest. The pair collapsed from around 1.18 in August 2022 toward 0.98 back then, whereas this year it eased from roughly 1.18 at the start of the conflict in the Middle East to just below 1.14 before rebounding above 1.17.

Positioning has also shifted: traders who were betting about $23 billion on euro gains in February 2026 are now wagering around $6 billion on a decline, while volatility, as reflected by the one-month options benchmark, which had surged into double digits in 2022, has slumped since March and is not far from all-time lows.EURUSD, betting, natgas in Europe and North America,
eurozone c/a and volatility

(Jeremy Boulton is a Reuters market analyst. The views expressed are his own)