Value of Euro, U.S. dollar on par for the first time in 20 years

July 12 (UPI) -- The euro and the U.S. dollar reached parity on world currency markets for first time in 20 years on Tuesday, driven by European recession worries and Russia's invasion of Ukraine.

The euro fell to $1.0003 mid-Tuesday morning, trading on par with the U.S. dollar for the first time since November 2002, when it was worth 99 U.S. cents. The euro later rebounded a bit to $1.0007.

The European currency has risen steadily against the dollar since then, reaching almost $1.60 in 2008 as the United States was struggling with the fallout of the global financial crisis and the Great Recession.

In recent months, Europe's economic outlook has worsened in large part due to soaring gas prices and broader inflation that has reached 8.6% in the eurozone.

"The euro neared parity with the dollar for the first time since 2002," Market.com chief market analyst Neil Wilson wrote in a note Tuesday. "It's been on the slide for months but the euro took a fresh low as fears mount Russia could cut off gas supplies to Europe this winter."

An additional blow to the euro came when French economy and finance minister Bruno Le Maire warned last weekend there is a "strong chance" Moscow will carry out its threats.

"This is further stoking recession fears in the bloc and the currency just cannot catch a bid," Wilson wrote.

The British pound also fell against the dollar Tuesday, dipping to $1.185, its lowest since March 2020.

The pound is being buffeted by political uncertainty in Britain as many Conservative Party leadership candidates looking to replace Boris Johnson as prime minister are promising deep tax cuts.