The currency fell to just below par with the US dollar for the first time in two decades yesterday. Analysts described this as “the worst year in euro history”.
The European single currency started the year much more comfortably, but has since fallen 12 percent against the dollar.
Rising gas prices on the continent after the Russian invasion of Ukraine have shaken any semblance of stability.
Fears that Vladimir Putin could cut supply, analysts expect the euro to fall even deeper.
It has fallen a total of 16 percentage points against the dollar over the past year.
Robin Brooks, chief economist at the Institute of International Finances, described the event as the “end of the beginning” before the euro’s collapse.
He wrote in a post on Twitter: “The Russian invasion of Ukraine is a seismic shock to the eurozone because so much of Europe’s growth model is based on cheap Russian energy.
“That’s over and done.
“Recession and structural headwinds are coming.”
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But: “Nobody expects a prolonged multi-year weakening cycle below parity, which this war can bring.”
US bank Goldman Sachs, quoted in the Financial Times, said the currency is now “on the brink of a recession”.
The newspaper added: “The risk that aggressive rate hikes could plunge the US into recession, coupled with the likely damage to the European economy from its reliance on Russian energy, was enough to finally push the euro on Wednesday. 0.4 percent lower tips to reach the historic milestone.”
The euro plunged to a low of $0.9998 yesterday afternoon.
This was the lowest level since December 2002.
However, the currency has only spent a limited time below parity since it became freely available in 1999, falling to a record low of $0.82 in 2000.