The euro just can't hold its ground. The single currency is losing to the dollar and is unlikely to recover anytime soon. According to Bloomberg, the euro is once again at risk of depreciating and falling to parity with the US dollar.

The news agency reports that the last time these two currencies reached a 1:1 ratio was in 2022, following the onset of the Russia-Ukraine conflict. Analysts now fear a replay of this scenario, as the European economy remains under pressure from the potential imposition of tariffs by US President-elect Donald Trump. Meanwhile, trade between the US and the EU continues unabated. The US imports a wide range of European goods—from cars to household chemicals, Bloomberg notes.

Political upheavals in France and Germany are adding fuel to the fire. Against this backdrop, the investment climate has deteriorated, and the economies of these countries are going through malaise. The governments of France and Germany face the challenging task of minimizing or resolving structural issues that are hindering economic growth.

At the same time, global demand for dollar-denominated assets is rising. Traders and investors are anticipating economic growth and corporate profit boosts from Trump’s administration. Interestingly, after the US elections, ten top-rated banks unveiled their bearish forecasts for the single European currency. In this context, some analysts fear that the euro could even sink below parity with the US dollar. Such a scenario would trigger high volatility of the single currency, raising the risk of some eurozone countries abandoning this payment instrument in the long term.

Notably, experts defined November as the worst month for the euro in 2024. The currency weakened against the greenback by nearly 3%, sliding to a two-year low. This has negatively impacted sectors of the European economy that heavily depend on US revenues, amid fears of potential import tariffs.