the euro at its lowest since November 2022 against the dollar

(Boursier.com) — The year is off to a bad start for the euro. Under pressure for many weeks, the European currency is at its lowest level against the dollar in more than two years due to concerns about the European economy and the divergence in monetary policy between Europe and the United States. The common currency dropped 0.3% to $1.0325 between banks, the lowest since November 2022, bringing its decline since the end of September to around 8%.

The euro is being dragged down by fears that the region's export-oriented economies will be hit by U.S. tariffs and by expectations that the European Central Bank will cut interest rates more aggressively than the Reserve federal. Political instability in the bloc's largest economies also weighs.

“For Germany and France, the weak growth prospects are mixed with political uncertainties and the expectation that the ECB can announce further consecutive rate cuts in the spring,” Jane Foley, head of the FX strategy at Rabobank, which sees the euro moving towards parity with the dollar in the second quarter. The last time this key psychological threshold was crossed was in 2022, after Russia's full-scale invasion of Ukraine triggered an energy crisis in Europe and raised fears of a recession.