STORY: The euro has fallen to one-year lows and could hit the $1 mark.
A weakening economic outlook on the continent has hit the currency.
So did Donald Trump's U.S. election win, as it raised the prospect of a hike in tariffs that could deal a fresh blow to the euro zone economy.
::The significance of EUR/USD parity
For traders, the $1 mark is a key psychological level - known as euro-dollar parity. The drop could exacerbate negative euro sentiment, leading to a further depreciation.
This happened in the early 2000s and again for a few months in 2022, when U.S. interest rates were rising faster than euro zone rates as Europe grappled with the energy price surge that came with the war in Ukraine.
::The impact on businesses and consumers
A weak currency typically raises the cost of imports. That can lead to prices of food, energy and raw materials rising, aggravating inflation.
Conversely, a fall in the euro makes its exports cheaper - good news for Europe's automakers, industrials and luxury retailers, for example, and for individuals or investors with overseas incomes.
It's especially positive for Germany which is a huge exporter and has suffered from a number of headwinds including a weak Chinese economy.
::Is the Euro being singled out?
Many currencies of major U.S. trading partners have been hit hard in the past several weeks by tariff worries.
That includes the Mexican Peso and the Korean won. If the past is any guide.. it could be short-lived.
The Euro fell in the six weeks after Trump's first election victory in 2016 before recovering.
