Euro Falls Below Parity for the First Time in 2 Decades
U.S. dollar and Euro banknotes are photographed in Frankfurt, Germany, in this illustration picture taken on May 7, 2017. Kai Pfaffenbach/Illustration/Reuters
LONDON—The euro dropped below parity against the dollar the first time in almost two decades on Wednesday, as a hawkish U.S. Federal Reserve and growing concern about rising recession risks in the euro area continued to batter the single currency.
The euro started this year on a strong note given a post-pandemic economic recovery. But a conflict between Russia and Ukraine, surging European gas prices, and fears that Moscow could cut off supplies completely have hurt the single currency by raising the specter of recession.
“Americans should back up the truck if they plan to take a European vacation over the next few years. Also, a strong dollar could start to bring down the 2023 S&P consensus earnings of $250, which has remained stubbornly too high.”
Olivier Konzeoue, Director in the Fx Team, UBP
“We are seeing that parity is acting as a support level at present, but should it break $0.9995 we see room for a move all the way to $0.97 and possibly even $0.95.
