Euro falls below dollar parity for first time in 20 years

DUBLIN: The euro dropped below parity against the dollar today for the first time in almost 20 years. The euro tanked as much as 0.4% to a low of $0.9998.

Concerns over Russian measures related to Europe’s energy supply are seen to be causing a slowdown in the Eurozone. The war in Ukraine has caused an energy crisis that has affected the continent’s growth outlook.

The European Central Bank’s slowness in raising interest rates has also weakened the euro, leaving other central banks unable to raise interest rates.

The Eurozone has plans to raise interest rates, but no action has yet been taken. The ECB is expected to raise interest rates next week.

The euro has lost nearly 12% against the dollar since the start of the year. The euro currency was launched in 1999, but in December 2002 the euro overtook the dollar.

Experts say that the currency value would have increased if the central bank had raised interest rates. It could also attract investors looking for huge returns by holding euro assets. The US central bank had raised interest rates to avoid being hit by the current crisis.