The U.S. dollar and the euro have reached parity for the first time in 20 years.
A euro and the United States dollar now share the same value. The change became official on Tuesday, with its value decreasing by 12 percent since the beginning of 2022. This comes after the Russian invasion of Ukraine sparked inflation and skepticism around the energy supply.
The European Union is currently in the process of figuring out how it can move its dependence on Russia for oil and gas, CNN reports. The union gets about 40 percent of its gas through Russia, and recently Russia pulled back at least 60 percent of its gas supplies from E.U. countries, which include France, Poland, Sweden, Italy and more.
If things continue as they are, the euro could lose even more value.
In a note, Deutsche Global Head of F.X. Research George Saravelos wrote that a euro trading below the U.S. dollar with a value of $0.95 to $0.97 could “well be reached,” adding that that’s “if both Europe and the U.S. find themselves slip-sliding in to a (deeper) recession in Q3 while the Fed is still hiking rates.”
