The euro plunged to its lowest level in two decades on July 5, shedding close to 1.5% to hit $1.0265 against the greenback, as fears of a recession in the 19-country euro zone ramped up.
Euro zone inflation recorded a new record high in June at 8.6% (year-on-year) buffeted by skyrocketing gas prices in recent months.
After teetering on the brink of parity with the dollar for several days, Europe's single currency, the euro, has tumbled below the greenback for the first time in two decades.
It slumped to $0.9998 against the dollar on July 13, while overall it is down almost 12% so far this year.
For most of its history since its launch in 1999, the single currency has been worth more than the dollar. The last instance when the euro traded below the dollar was in December 2002.
On the other hand, the dollar has been quite resilient in recent months, buoyed by the US Federal Reserve hiking interest rates. America’s Central Bank raised rates by 75 bps in June. Furthermore, global recession fears have increasingly driven investors to the safe-haven dollar.
According to analysts, after this plunge on Wednesday, the euro may slide down further, to reach $0.96 or even $0.90 against the backdrop of skyrocketing inflation buffeted by runaway gas prices.
