The euro fell below the US dollar for the first time since late 2002

The euro fell on Wednesday, hurt by the gloomy outlook for the European economy and the possibility of a complete cut in Russian gas supplies, below the symbolic threshold of the US dollar, which has not been crossed since December. 2002.
The euro traded once morest $0.9998 at around 12:45 GMT, a precedent since trading in the European currency began, before recording a further rise, following official figures showed rising inflation in states. States in June, which reinforced expectations that the US Federal Reserve would follow a policy of tougher reviews.
The inflation rate reached 9.1% in June over one year, once morest 8.6% the previous month, according to the consumer price index (CPI) published on Wednesday by the US Department of Labor.
Initially, the index pushed the dollar higher before falling later in the session. Around 4:00 p.m. GMT, the euro rose 0.40% to $1,0078.
“Investors are beginning to believe that inflation is so high that it will cause so much damage to the economy that the US Federal Reserve will soon have to stop raising interest rates, and even reverse the trend in the first quarter of next year,” says StoneX analyst Fouad Razakzadeh.
But Stephen Innes, analyst at SPI Management, believes that “a rebound in the euro should follow sales until (the pipeline) Nord Stream 1 resumes pumping” and deliveries of Russian gas to Europe.
Fears are increasingly fueled by the complete halt to Russian gas exports to Europe, as the French government raised the “possibility” of cutting off supplies last weekend.
“How far can the fall of the euro go? said analyst Jane Foley of financial services firm Rabobank. It probably depends on Russia’s willingness to escalate the economic war with Europe,” noting that “knowing President (Vladimir) Putin’s intentions is not an easy thing.”
Given the weak growth in the euro zone, the European Central Bank can raise interest rates, but with difficulty, in order to fight once morest inflation, which reached 5.8% in June in France and 7.6% in Germany, according to figures released Wednesday morning.
The European currency has lost nearly 12% of its value since the start of the year.