Euro slides under dollar

The euro fell below par against the US dollar for the second time in just over a month on Tuesday, as investor fears of a euro-zone recession mounted.

The single currency slipped as low as $0.9935 before reversing some losses. That’s one of the lowest levels in two decades after rising to around $1.03 at one point earlier this month. The euro traded at around $1.15 in February.

“The end of summer sees the euro under pressure again, partly because the dollar is bid and partly because the sword of Damocles hanging over the European economy is not going away,” Societe Generale SA FX strategist Kit Juckes wrote to Bloomberg in a note to clients.

The euro has been on a steady downtrend lately as fears of a euro zone recession have intensified amid rising uncertainty over Russian energy supplies. In July, the euro reached parity with the dollar for the first time since 2002.

According to Morgan Stanley, the euro could fall to $0.97 this quarter, a level not seen since the early 2000s. Meanwhile, Nomura International forecasts that it will drop to $0.975 by the end of September, after which the market may wait for it to break through or possibly move below $0.95 as pressure on energy supplies increases the risk of power outages and likely to require increased energy imports into the eurozone.