Euros are worth less than US dollars for the first time in almost two decades

The Euro has slid to below to the dollar for the first time in 20 years, the first time since it became well established as a currency.

It reached parity with USD yesterday amid fears of a difficult winter for the Eurozone, with Russia potentially cutting off the gas supply to the continent amid the war on Ukraine.

Today it slid further still, with many seeing the dollar as a safer bet during times of uncertainty.

The stronger dollar has also been attributed to policies from the Federal Reserve (the US central bank) which has sharply raised rates.

One euro is now worth 0.99 dollars, having lost more than 10% since the beginning of 2022.

This is its lowest level since December 2002, just three years after the Euro was introduced.

Since 1999 it has usually kept above the dollar, except for dips in its first few years when it sank to a record low of $0.82 in October 2000.

Americans seeking a trip to see Paris or Barcelona may appreciate their exchanged currency going further, but it could bring drawbacks for the US too.

It may become harder for US companies to sell goods overseas as they are proportionally more expensive, while it could benefit European companies exporting goods to the US.

But some consumers may welcome being able to buy imported goods for cheaper.

For Europeans, the weakened euro could worsen their difficulties getting fuel, as imported oil is priced in dollars.

Meanwhile in the US, inflation reached a new 40-year high of 9.1%, driven up by a spike in fuel costs, more expensive food and rent, and pricier cars and hotel rooms.

Annual inflation in the eurozone’s 19 countries is also high, hitting 8.6% in June, surging past the 8.1% recorded in May.

Inflation is now at its highest level since record keeping for the euro began in 1997.

Last month, Russia cut flows to 40% of the Nord Stream 1 pipeline carrying Russian gas to Germany.

German Economy Minister Robert Habeck said: ‘Based on the pattern we’ve seen, it would not be very surprising now if some small, technical detail is found and then they could say “now we can’t turn it on any more”.’

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