For the first time in nearly two decades, one dollar equals one euro.
On Tuesday, July 12, both currencies reached parity after nearly 20 years of the euro being superior to the dollar.
1 EUR equals 1 USD as of Tuesday. The change means that European companies and consumers will pay more for imported goods and services, while European exports will immediately become cheaper in international markets. Since early February, when it was worth more than $1.13, the euro has dropped dramatically in value.
It comes as inflation in the European Union has been 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.
The euro first hit price parity with the dollar in December 1999, just less than a year after its debut at $1.17. For a turbulent three years surrounding the 2001 dot-com crash, the dollar remained stronger than the euro. Worried investors treated the US currency as a safe-haven asset to hold during the burst of the tech bubble. But after 2003, the euro has remained stronger than the US dollar.
The parity of both currencies is a sign that investors are worried that a looming economic crisis will seriously affect Europe.