Euro hits $1.00005, dollar soars to new two-decade highs

The US dollar and European single currency came within a whisker of parity for the first time since 2002 on Tuesday morning, as financial markets fret over the likelihood of a global recession ahead.

The euro teetered on the edge of hitting $1 for the first time since 2002, as the dollar attracted haven buyers as well as support from the gap between interest rate expectations in the US compared with the eurozone.

The dollar index fell 0.102%, with the euro up 0.1% to $1.0049, while sterling hit another two-year low and the yen was not far off its weakest in more than two decades .

The single currency fell to just $1.0003 on Tuesday morning, pushed lower by worries that the scheduled shutdown of the Nord Stream 1 pipeline – which transports natural gas from Russia to Europe – for maintenance could be made permanent.

Russia’s invasion of Ukraine in late February has triggered fears over Europe’s energy supply and hurt the region’s economies, pushing the euro 12% lower against the US dollar so far this year.

As long as the pair navigates below the 5-month support line near 1.0570, further losses remain in trade.

In the longer run, the pair’s bearish view is expected to prevail while below the 200-day SMA at 1.1055.