For the first time in almost two decades, one U.S. dollar is now equal to one euro.
The Daily Page gathered that for about 20 years, the euro is superior to the dollar.
However, both currencies have reached parity on Tuesday, July 12, 2022.
This comes as the European Union has seen inflation exacerbated by Russia’s invasion of Ukraine.
EU and U.S. sanctions have reduced the flow of Russian oil into Europe, and the currency block is much more dependent on Russian energy than the U.S.
“There doesn’t seem to be a lot of support for euro at this point. It does not just relate to gas prices but to what seems to be a split within the ECB over how far they raise rates,” Sarah Hewin, senior economist at Standard Chartered, told Reuters.
“The expectation is for the (US Federal Reserve) to do 75 bps this month and its aim seems to be to get to neutral (rates) as soon as possible, while with ECB, it’s more of a mixed message given the backdrop over gas.”
As at Tuesday, 1 EUR equals 1 USD. The shift means European companies and consumers will pay more for the goods and services they import, while European exports become immediately cheaper in international markets. The euro has experienced a dramatic loss of value since early February when it was worth over $1.13.