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

Euro and dollar bills showing arrows for each up and down

One euro is now worth $0.99 (Picture: Getty)

The euro has slipped below the dollar for the first time in 20 years, the first time since it has become a well-established currency.

It reached parity with the USD yesterday amid fears of a difficult winter for the euro zone as Russia may cut gas supplies to the continent amid war against Ukraine.

It slipped even further today as many view the dollar as a safer bet in times of uncertainty.

The stronger dollar has also been attributed to Federal Reserve (US Federal Reserve) policy of raising interest rates sharply.

One euro is now worth $0.99 after losing more than 10% since early 2022.

This is the lowest level since December 2002, just three years after the introduction of the euro.

It has generally held above the dollar since 1999, except for dips in the early years, when it fell to a record low of $0.82 in October 2000.

Graph showing one euro is now worth $1.01

It’s a good time for Americans to vacation in Europe (Image: Google)

Americans aiming for a trip to Paris or Barcelona may appreciate that their exchanged currency goes farther, but it could also come at a disadvantage for the US.

US companies could find it more difficult to sell goods abroad as they are proportionally more expensive, while European companies could benefit from exporting goods to the US.

However, some consumers will appreciate being able to buy imported goods cheaper.

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

Meanwhile, US inflation hit a new 40-year high of 9.1%, buoyed by rising fuel costs, more expensive groceries and rent, and more expensive cars and hotel rooms.

Annual inflation is also high across the 19 euro-zone countries, reaching 8.6% in June, up from 8.1% in May.

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

Last month, Russia cut the flow of the Nord Stream 1 pipeline, which carries Russian gas to Germany, to 40%.

Economics Minister Robert Habeck said: “Based on the pattern we’ve seen, it wouldn’t be very surprising now if a small technical detail is found and then they could say, now we can’t turn it on”. ‘

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Justin Scacco

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