A euro currency symbol sits on display in the visitor centre at the European Central Bank (ECB) building in Frankfurt, Germany.
Alex Kraus | Bloomberg | Getty Images
The euro fell to its lowest level in two decades on Tuesday, sliding over 1% to hit $1.0305.
It comes as fears of a recession in the euro zone ramp up, as gas prices soar and the Ukraine war shows no signs of abating.
Euro zone inflation hit a record 8.6% in June, prompting the ECB to give markets advance notice of its intention to hike interest rates for the first time in 11 years at its July meeting.
However, growing fears of a recession may limit the central bank’s capacity to tighten monetary policy. The July Sentix Economic Index on Monday showed investor morale across the 19-country euro zone has plunged to its lowest level since May 2020, pointing toward an “inevitable” recession.
The euro has lost over 9% of its value against the dollar since the start of the year.
This is a developing story and will be updated shortly.