On Monday, for the second time in just over a month, the euro fell below parity with the US dollar as fears of a recession in Europe build.

The euro fell to as low as $0.9935, one of the lowest levels seen in twenty years, before regaining some of its losses. That is a fall from where the euro had been trading, at $1.03 earlier in the month, and from the roughly $1.15 it had been trading at in February.

Societe Generale SA foreign exchange strategist Kit Juckes wrote in a note, “The end of summer sees the euro back under pressure, partly because the dollar is bid and partly because the Damoclean sword hanging over the European economy isn’t going away.” 

The euro has been steadily declining of late as a tight energy market being produced by uncertainty about Russia’s supplies is driving fears of rampant inflation and economic recession. The euro declined until it first hit parity with the dollar in July, and it has slowly trended downward since.

Analysts at Morgan Stanley have speculated that the euro could decline to 0.97 versus the dollar this quarter. It has not been that low since the early 2000’s. Nomura International’s analysts see teh euro falling to 0.975 by the end of September, after which it may continue down to, or even through the 0.95 level, if energy market issues were to necessitate rolling blackouts this winter, and make it necessary to dramatically increase energy imports into the Eurozone, triggering even worse inflationary pressures.

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