For the first time in two decades, the exchange rate between the Euro and the US Dollar has reached parity. It has fallen to its lowest level since 2002, even briefly dipping just below a one-to-one exchange rate with the US currency at times last week. Even more extraordinary than breaching this parity is how quickly the euro has dropped against the dollar. The currency, shared by 19 European countries, has tumbled more than 12 percent this year, as the dollar strengthened against almost every major currency in the world. The symbolic, perfect parity has become a focal point for investors. More than that, it’s an important psychological distinction in today’s macroeconomic climate. In a note to clients, analysts at Dutch bank ING mentioned that ‘1.00 is probably the biggest psychological level around’.

History of The Euro

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