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The Euro Is Back Below Its 1999 Launch Value

The euro’s fall against the dollar continues Wednesday after it broke through a symbolic barrier in early trading.

The euro slipped below $ 1.1747, the rate at which it was valued when it launched in 1999. I t was most recently this low in 2006, nine years ago.

After being introduced,  t he euro depreciated almost immediately, falling to lows of about $ 0.85. But it has spent the vast majority of the past decade higher.

Federal reserve Bank of St. Louis, Business Insider

The recent fall follows the announcement from the European Courts of Justice that Outright Monetary Transactions (OMT), the program credited with ending the euro crisis, is legal. 

It is extremely unlikely that the decline of the euro is going to stop soon. The Federal Reserve and European Central Bank are diverging in policy, a scenario that should strengthen the dollar and weaken the euro. The ECB still probably has a quantitative-easing stimulus program to come, too, which could bring down the value of Europe’s currency by introducing extra euros into the market.

Goldman Sachs is even predicting that the euro and dollar will be back at parity by the end of 2017. That would be the first time since 2002. 


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