Deepening fears about the health of the global economy have shoved the euro down to parity against the US dollar for the first time in 20 years.

Investors gravitate towards the perceived safety of the dollar in times of stress — a feature that led to a ferocious rally in the US currency when the pandemic took root in 2020. But that shock did not drag the euro down to this point. Nor did the debt crisis that came close to dismantling the currency bloc a decade ago.

Now, though, the risk that aggressive interest rate rises could tip the US into recession, combined with the likely damage to the European economy stemming from its dependence on Russian energy, has been enough to tip the euro a last 0.4 per cent lower on Wednesday to hit the historic milestone.