File - Wads of euro banknotes are stacked in a pile at the GSA Austria (Money Service Austria) company's headquarters in Vienna July 22, 2013. REUTERS/Leonhard Foeger
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The euro could soon be doing something it has only done a couple of times in its 16-year existence – trading 1-to-1 with the dollar.The euro has been falling mainly because of the divergence in economic performance between the eurozone and the United States.While the European Central Bank has slashed interest rates and launched a massive money-creating stimulus, effectively diluting the value of the euro, the U.S. Federal Reserve is doing the opposite – it's preparing to raise interest rates following its decision last year to bring an end to its own multiyear stimulus.That prompted a flurry of dollar buying, with the euro sliding 1.6 percent to $1.0858 .In its early days, the euro was relatively friendless, and in late 2000, the European Central Bank and other central banks intervened in the markets to prop up the ailing currency, which at one stage fell to a low of a little over $0.82 .That appeared to help and the euro staged a rebound, pushing back above parity with the dollar in late 2002 .
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