Join on WhatsApp 
Join on Telegram Rabat – The euro has fallen below the US dollar for the first time in 20 years, down by 0.4% in the day’s trading to only about $0.998.
Geopolitical factors in Europe, most notably the Russia-Ukraine war, have caused the euro to slowly but steadily lose its value over the past few months.
On Tuesday, July 12, the European currency hit parity with the dollar for the first time in 20 years, as the European Central Bank failed to raise interest rates to keep up with inflation.
Currencies tend to rise or maintain their value as relevant central banks increase interest rates, with international investors anticipating greater returns for holding assets in that currency.
In contrast to the EU, the American Federal Reserve has steadily hiked interest rates, strengthening the dollar’s value in the world market, especially as investors view dollar assets as a safe haven amid global turmoil.
As a result of the euro’s declining value, European countries now face more expensive imports, especially for vital goods that are priced in dollars, such as oil.
While the euro at first lagged behind the dollar following its launch in 1999, the last time it traded below the American currency was in 2002.
