THE euro has reached a 20-month against the dollar, as the two currencies reflect contrasting outlooks between the eurozone and US economy.
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The European Central Bank (ECB) is widely expected to announce an extension of staggering trillion euro money-printing programme before it runs out in March, in another desperate bid to shore up the economy.
On the other hand, the strengthening US economy means the the Federal Reserve is likely to to raise interest rates next month.
As a result, investors are dumping the euro and piling into the US dollar.
Experts believe the two currencies could now reach parity in the coming months.
The single currency is now sitting at just 1.0552 against its American counterpart.
Jordan Hiscott, Chief Trader at ayondo markets, said: “The US Dollar’s strength continued this morning, moving to a 10-year high.
"Two factors are driving this bull market– namely the extreme likelihood of a Fed interest rate rise next month, with possible further hikes in 2017, along with the surprise election of Donald Trump.
“Trump’s proposed polices bear similarities to the Ronald Regan era, specifically the increased infrastructure spending, deficit spending and tax cuts, the culmination of which will lead to a large rise in inflation.
“One of the biggest casualties of the stronger dollar has been the Euro. The currency has fallen from 1.1290, just after the US election, to 1.0518 today, and increasingly looks likely to be on parity with the US dollar by end of 2017.”
Fawad Razaqzada, market analyst at Forex.com, added: "The EUR/USD is again looking very weak after the recent sell-off has paused for breath at the start of the week.
"Some may argue that a rate rise in December is basically priced in by now.
"However, it is what happens after December and if investors believe that the Fed will still be more hawkish then than the ECB, then we could actually see the EUR/USD drift further lower.
"I still think parity represents a fair value for the EUR/USD given the diverging paths of interest rates in the Eurozone and the US…. Indeed, we could even fall below parity."
http://www.express.co.uk/finance/city/736069/Euro-sinks-to-20-month-low-against-dollar
