For the first time since 2002, one euro equals one dollar

The value of the euro and the dollar were aligned on Tuesday, for the first time in 20 years.

The euro fell to the dollar on Tuesday, a level not seen since the year it was introduced two decades ago, weighed down by the risks of disruption to Russian gas supplies to the European economy.

Investors preferred the safe-haven dollar, which has gained nearly 14% since the start of the year and has been trading briefly against the dollar against the euro around 09:50 GMT (11:50 a.m. in Paris), a peak since December 2002.

The market is worried about a major energy crisis on the Old Continent, which calls into question Russia’s return to gas flows after a maintenance outage on the Nord Stream 1 gas pipeline. This situation is raising fears of a recession in Europe.

Jeffrey said energy from Russia is “at the heart of the turmoil in Europe” and Canada’s announcement on Saturday that it will return turbines destined for the Nord Stream gas pipeline to Germany to ease an energy crisis with Russia “has no positive effect.” Haley, an analyst at Oanda.

On Monday, Russian energy giant Gazprom began ten days of maintenance on the Nord Stream 1 gas pipeline. Germany and other European countries are waiting to see if gas deliveries will resume.

“The main question is whether the gas will return after July 21,” notes Jeffrey Haley. “It seems the markets have already made up their minds.”

For Mark Heffel, an analyst at UBS, halting Russian gas shipments to Europe “would cause a recession across the eurozone with three consecutive quarters of economic contraction.”

Consequently, the European Central Bank (ECB) will find it difficult to tighten its monetary policy to combat accelerating inflation without worsening the economic situation.

The US Federal Reserve (Fed) has more freedom to continue raising interest rates, as employment figures released on Friday showed that the US economy is improving so far.

Safe havens sought

The slide of the euro could continue. On Wednesday, inflation data from France, Germany and the United States may raise investor concerns about the divergence of economies on both sides of the Atlantic.

“If US inflation is stronger than the market expects, it could benefit the dollar,” said Fouad Razakzadeh, analyst at

The euro rose very slightly after hitting the dollar, and it was trading around 10:10 GMT for $1.0024.

“Investors are struggling to cross the token parity threshold” and to bring the euro below that level, said Walid Goodmany, an analyst at XTB.

“This slow pace proves that this is a long-term move to sell euros and buy dollars, not market manipulation,” adds Fouad Razakzadeh.

The euro is also struggling against the Swiss franc, which is also a safe haven: it fell to 0.9836 Swiss francs, the lowest level since 2015.

The dollar also shines against other currencies that are considered vulnerable: the pound fell to 1.1807 dollars, a level it has reached more since March 2020, when the Covid-19 epidemic in Europe, in full Brexit negotiations, began to push the British. The currency has returned to its lowest level since 1985.

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