The euro has fallen below the dollar for the first time in almost 20 years as the war in Ukraine pushes the single currency lower.
A single euro was buying $0.998 in the forex market as of 12:45 GMT, down 0.4% in day trading.
Fears that Russia could cut Europe’s energy supplies have increased the likelihood of a euro zone recession.
The European Central Bank is lagging behind other central banks in raising interest rates, further weakening the euro.
Currencies tend to appreciate when central banks raise interest rates, as international investors seek higher returns on holding assets in that currency.
The dollar has also been strong in recent months, bolstered by rate hikes by the US Federal Reserve and investors seeking safe haven assets in times of global turmoil.
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A weakening currency will make imports more expensive for eurozone countries, particularly dollar-priced commodities such as crude oil.
That could contribute to even higher inflation in the Eurozone, which is already at 8.6% in June.
A spokesman for the ECB said it was “not targeting a specific exchange rate. However, we always pay attention to the impact of the exchange rate on inflation, in line with our price stability mandate.”
The bank is expected to start raising rates next week.
Year-to-date, the euro is down almost 12% against the dollar.
The single currency has been worth more than the dollar for most of its history. It lagged behind the dollar in the years following the currency’s introduction in 1999, but last traded in December 2002 – less than a year after euro notes and coins were first introduced.
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