Mucahithan Avcioglu
01 July 2025•Update: 02 July 2025
ISTANBUL
The euro increased to its highest since 2021 against the US dollar on Tuesday after annual inflation in the eurozone hit the European Central Bank (ECB)'s target of 2%.
The currency was up 0.1% against the dollar to 1.1821 as of 0930GMT, the highest since August 2021.
The rise was due to the confirmation of the euro area's annual inflation as a 2% medium-range target of the ECB.
The figure matched the European Central Bank's (ECB) target range and market expectations.
The biggest upward driver of inflation was services at 3.3% in June, followed by food, alcohol & tobacco at 3.1% and non-energy industrial goods at 0.5%.
On the other hand, energy prices were the biggest downward contributor to the inflation, down 2.7% annually.
When the euro was introduced in 1999, the euro/US dollar exchange rate was 1.17, but the currency rapidly lost value against the dollar, falling to 0.82 in October 2000, but gaining between 2002 and 2008.
The exchange rate reached a record high of 1.6 in 2008, and while it enjoyed a high rate for a while, parity declined to 0.96 in September 2022, its lowest in the last two decades and below the 1.0000 parity level.
