Euro tumbles to 20-year low, putting parity with dollar in sight

The euro has dropped more than 9% against the dollar this year as record inflation has escalated the squeeze on households and firms. Picture: Michael Nagle/Bloomberg

The euro sank to a 20-year low against the US dollar as the prospect of a less aggressive hiking cycle by the European Central Bank added to conviction the common currency will tumble to parity with the greenback.

The single currency fell as much as 1.2% to $1.0298, its weakest level since December 2002. The losses came as money markets trimmed ECB tightening bets after French services PMI was revised lower Tuesday, widening the interest-rate differential with the Federal Reserve.