Euro Reaches Parity Against the US Dollar, While the USD Index Taps a 20-Year High

Eight days ago, the euro tapped a record low against the U.S. dollar as it hit $1.028 per unit against the USD last Tuesday. This week, the official currency for 19 of the European Union’s member states reached parity against the U.S. dollar for the first time in 20 years.

Euro Hits Parity Against the US Dollar, Greenback Skyrockets Against a Basket of Fiat Currencies

Even though it was a goal for the European Union (EU) to introduce a sovereign fiat currency for the EU back in the sixties, the euro did not get introduced until January 1, 1999. At first, the euro was introduced virtually, and by 2002 bills and coinage started to circulate. Close to 24 years later, the euro is not doing well against America’s greenback, and the EU’s sovereign currency reached parity with the U.S. dollar on Tuesday, July 12.

The EU has been suffering from significant inflation due to the monetary easing that happened amid the Covid-19 pandemic, and the Ukraine-Russia war. Prior to the war, the EU was getting around 40% of the EU’s gas from Russian exporters. The U.S. dollar has seen significant demand in recent times as the fiat currency spiked to a 20-year high against a basket of fiat currencies on Wednesday.

Last week, Germany printed its first trade deficit in goods in three decades. Analysts are finding it hard to envision that things in the eurozone could improve in the near future. “Given the nature of Germany’s exports which are commodity-price sensitive, it remains hard to imagine that the trade balance could improve significantly from here in the next few months given the expected slowdown in the eurozone economy,” strategists from Saxo Bank said on July 12.

The euro has met parity with the U.S. dollar in the past, as the fiat currency matched the dollar’s exchange rate back in 2002, the same year euro-based notes and coins were issued. At the time of writing, the EUR’s exchange rate against the USD is $0.9998. While the euro slumped this week, the U.S. dollar index tapped $108.56, a value not seen since October 2002. Despite the record inflation in the U.S., America’s greenback has been extremely robust compared to most of the fiat currencies circulating across the global economy today.

What do you think about the euro reaching parity with the U.S. dollar this week? Let us know what you think about this subject in the comments section below.

Earning Passive Income With Crypto

Related Posts

SHIB Metaverse: How Will it Impact the Price of Shiba Inu?

SHIB Metaverse: Shiba Inu is one of the best-known cryptocurrencies on the market, and was launched in August 2020. A little over 5 months ago, it announced…

PoW Miners Rake in Profits Mining ETH Until the End, Ethash Networks Expect a Boost, JPMorgan Strategists Say ETC Could Benefit

In just over a month’s time, The Merge is likely to be implemented on the Ethereum blockchain and the network’s proof-of-work (PoW) miners will be forced to…

Another Stablecoin Depegs From USD Parity, Polkadot-Based AUSD Loses 98% in Value

2022 has been the year of broken stablecoins as a myriad of dollar-pegged crypto assets depegged from their dollar value this year. On August 14, the Polkadot-based…

Weekly NFT Sales Show Improvement, Fantom and Immutable X NFT Volume Spikes

Non-fungible token (NFT) sales managed to climb higher during the last seven days than the previous week’s overall sales. This week’s NFT sales managed to jump over…

Aave Responds to Blocking Addresses Over Tornado Cash Clampdown

DeFi lending protocol Aave Protocol said the TRM API on its app was responsible for blocking addresses that received ETH from unknown sources through Tornado Cash. In…

Brazilian Crypto Investment Platform Bluebenx Stops Withdrawals Under Hack Allegations

Bluebenx, a Brazil-based cryptocurrency investment platform, suspended withdrawals last week due to an alleged hack that made the company lose more than $31 million. The company announced…