The US dollar recently strengthened against gold. Then it reached parity with the euro and continued rising. Moreover, analysts predicted in spring 2022 that the dollar would cost more than the euro in 2023.
Currently, the euro is hitting its 20-year lows. Apparently, it may decline even lower in the near future. The EU economy is facing a lot of problems: all-time skyrocketing inflation, energy insecurity, and recession fears. All these factors negatively affect the euro. Notably, it has never fallen to or below parity with the dollar in two decades. However, the situation has changed this summer. "The outlook for the euro is now very, very much tied to energy security risk," currency strategist at Rabobank Jane Foley said.
According to Bloomberg, the euro is now trading at the same levels as in 2002. Moreover, it also fell below parity with the dollar in mid-July 2022. Apart from other reasons, it was caused by the European Central Bank’s delayed decision to tighten its monetary policy amid high inflation. By the end of July, the ECB raised its benchmark interest rate to 0.5% year-on-year from zero.
