Analysts and investors are betting that the euro will continue tumbling even after it reached parity with the dollar as Europe’s economic outlook darkens and the US Federal Reserve lifts rates to tackle inflation.
The euro has already dropped 12 per cent this year, leaving it to trade at roughly $1, a level not seen since in two decades. A rising number of foreign currency analysts are now expecting the common currency to fall deep into the $0.90 range in coming months.
The currency has been hammered by worries about a looming economic slowdown after soaring commodity prices — stoked by Russia’s invasion of Ukraine — triggered a widespread cost of living crisis. Many analysts say that the bloc’s intensifying energy woes will worsen in the colder winter months, sparking fresh challenges.