The euro’s depreciation accelerated on Friday morning (8) and the single European currency traded below $1.01 for the first time since late 2002, amid concerns over the old continent’s economy.
At 8:00 GMT (5:00 GMT), the euro was trading at $1.0106 just minutes after hitting $1.0072.
The move brings the euro closer to parity with the dollar something not seen since the introduction of the European currency in 1999 (first as book currency and later as legal tender from January 1, 2002).
The euro bottomed out on July 5, 2001 when it traded at $0.8380.
The drop in the European currency is mainly due to fears of a global recession. Inflation has also put pressure on the euro.
Why is the euro falling?
The fall of the euro is linked to growing fears of a recession in the 19 eurozone countries. Surveys point to a slowdown in business development across the monetary union. The data suggests the region could shrink as the rising cost of living drives consumption down.
On Monday, European Central Bank Vice President Luis de Guindos warned that the euro zone economy could face a recession if industry is forced to adapt to energy shortages.
European gas prices hit their highest high in four months amid supply concerns after Russia partially suspended supplies.
The fall in the euro is coupled with a rise in the US dollar as higher US interest rates are expected. The aggressiveness of the American strategy contrasts with that of the European Central Bank, which is planning more moderate interest rate hikes.
In Brazil, the euro closed this Thursday at R$5.4304 while the dollar ended the day at R$5.3435. See quotes.
Sardenberg comments on the intense day in the markets amid growing fears of a global recession