EUR/USD extended its slide in the early European session and touched its weakest level since December 2002 below 1.0100.
The pair shows no signs of a convincing recovery and it wouldn’t be surprising to see the euro hit parity against the dollar at this point.
The risk-averse market environment helped the dollar regather its strength following a two-day consolidation phase. The US Dollar Index, which tracks the greenback’s performance against a basket of six major rivals, advanced to its highest level since late 2002 above 107.00.
Meanwhile, European Central Bank (ECB) Governing Council member Ignazio Visco said on Friday that the bank could consider a bigger rate hike in September after raising rates by 25 basis points in July.
Despite the worsening inflation outlook in the euro area, ECB policymakers sound relatively cautious regarding the rate outlook as they also have to think about the possibility of the euro area economy tipping into recession.
In other news, GBP/USD turned south in the European morning on Friday and dropped below 1.1950 amid renewed dollar strength. The US Dollar Index trades at its highest level in nearly two decades above 106.00 as investors await Nonfarm Payrolls data for June.
