Market history · Currencies ·
The euro falls to parity with the dollar
On 13 July 2022 the euro fell to parity with the US dollar for the first time since 2002. Reports from RTE, Euronews and others pointed to the energy crisis in Europe, the sharp rise in US interest rates and fears of recession as the drivers.
A weak euro raised the cost of imported energy for Europe, while US investors in European assets saw their returns reduced when converted back to dollars. For European investors holding dollar assets, the move helped.
The takeaway
Currency moves can add to or take away from the return on foreign assets, whatever the asset itself does.
Sources
This is a retrospective about a past event, provided for general information. It is not investment advice, does not describe RockLake's positioning at the time, and past performance is not a guide to future performance. Read the risk warning.